Back to Bankruptcy’s Equitable Roots: Recalibrate the Dischargeability of Student Loans Through a Modified Eighth Circuit Approach

This Note examines the bankruptcy courts’ attempt to satisfy the Undue Hardship Exception through the application of these four judicial tests. Through an analysis of each test’s shortcomings, this Note makes apparent the reasons why it is imperative for Congress to provide a definition of “undue hardship.” Not only have bankruptcy judges often bemoaned the duty to define “undue hardship,”15 but the four judicial tests employed by differing circuits have also created a lack of uniformity and consistency as to what constitutes “undue hardship” and, ultimately, whether a debtor is entitled to the discharge of their student loan debt.16 For example, a debtor residing in New York City will experience a much harder time establishing undue hardship than a debtor residing in St. Louis due to the different tests applied by the respective circuits.17 As it is unlikely that Congress will provide a definition of “undue hardship,” this Note proposes a new test to be adopted uniformly by the bankruptcy courts for the Undue Hardship Exception. A test that is adopted uniformly by all circuits will bring much needed consistency for both the bankruptcy courts and the debtors who seek discharge. This Note’s proposed test relies primarily on the current minority standard—the Eighth Circuit’s Totality of the Circumstances Test— bolstered with additional factors and considerations.

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