Dept of Education Hits Back at Student Debtors Seeking Relief

[eridani]

http://readersupportednews.org/news-section2/318-66/32948-obama-administration-hits-back-at-student-debtors-seeking-relief

On Tuesday, the Department of Education intervened in the case of Robert Murphy, an unemployed 65-year-old who has waged a three-year legal battle to erase his student loans in bankruptcy.

Unlike almost every single form of consumer debt, student loans can be erased only in very rare circumstances. Murphy’s case, which is currently being heard in a federal court in Boston, could make things a little easier for certain borrowers. A win for Murphy would relieve him of $246,500 in debt and could loosen the standard used to determine how desperate someone needs to be to qualify for relief.

The court asked the Education Department to weigh in on the matter. In a document submitted to the court on Tuesday, government lawyers urged the federal judges not to cede any ground to borrowers who say they are in dire financial straits. Doing so would imperil “the fiscal stability of the loan program” that has existed for half a century. The Department of Education did not immediately respond to requests for comment.

Murphy doesn’t deserve a break just because he is 65 years old, department lawyers wrote. Repaying his debt loan may require “that he remain employed at or past normal retirement age,” they said, even though “his income may top out or decrease” and “further employment opportunities may be limited.”

“That is part of the bargain that parents strike when they take out loans later in their work life,” the lawyers added. Murphy took out several loans to send his three children to college, but he lost his job at a manufacturing company in 2002 and has not been able to find work since.