Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Sen. Warren Invokes for bankruptcy protection for student borrowers

Author: Joel R. Glucksman

Date: May 23, 2014

Key Contacts

Back

During a speech at Suffolk University Law School recently, U.S. Sen. Elizabeth Warren called for an end to government profits on student loan debt, enhanced bankruptcy protections for student borrowers, and penalties for schools whose students default on their loans in large numbers, according to the Boston Globe.

Warren’s long-standing position on student loans – in particular, her past proposals for debt relief and refinancing – have contributed to her popularity among the younger generation and quite possibly to her recent election to national office. She argues that the overall debt burden placed on graduates is slowing the U.S. economy, as first time homeownership and auto loans for the young continue to decline.

“Many senior bankers in the industry are deeply concerned about student loan debt,” Rohit Chopra, the student loan ombudsman for the Consumer Financial Protection Bureau, told the news source. “For a competitive market to work, we need people to be able to not just go to school, but to progress economically. If they can’t do that, there could be real economic repercussions.”

Conventional wisdom holds that it is extremely difficult to discharge student loan debt through the bankruptcy courts. However, a higher-than-expected percentage of those who attempt to discharge such debt in this way are successful, according to Bloomberg Businessweek.

The news source noted that bankruptcy courts have adopted the “Brunner test” for student loan obligations, which requires debtors to meet three requirements in order to discharge their student loan debt, the news source explained. The debtor must be prevented from maintaining a “minimal” standard of living by the debt, must demonstrate a good-faith effort to maximize income and limit expenses and must show that the hardship is likely to continue for most of the repayment period.

While this standard has been widely considered very difficult to meet, Princeton University doctoral candidate Jason Iuliano estimated that 39 percent of debtors seeking to discharge student debt through a bankruptcy since 2007 were successful in a paper published in the American Bankruptcy Law Journal.

If Sen. Warren’s popularity, some of which seems to stem from her populist stance on student loans, is any indication, we may see more politicians taking up the younger generation’s cause in Washington.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
When Are New Jersey Business Owners Personally Liable for Corporate Debt? post image

When Are New Jersey Business Owners Personally Liable for Corporate Debt?

New Jersey personal guaranty liability is a critical issue for business owners who regularly sign contracts on behalf of their companies. A recent New Jersey Supreme Court decision provides valuable guidance on when a business owner can be held personally responsible for a company’s debt. Under the Court’s decision in Extech Building Materials, Inc. v. […]

Author: Charles H. Friedrich

Link to post with title - "When Are New Jersey Business Owners Personally Liable for Corporate Debt?"
Commercial Real Estate Trends to Watch in 2026 post image

Commercial Real Estate Trends to Watch in 2026

Commercial real estate trends in 2026 are being shaped by shifting economic conditions, technological innovation, and evolving tenant demands. As the market adjusts to changing interest rates, capital flows, and workplace models, investors, owners, tenants, and developers must understand how these trends are influencing opportunities and risk in the year ahead. Overall Outlook for Commercial […]

Author: Michael J. Willner

Link to post with title - "Commercial Real Estate Trends to Watch in 2026"
One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know post image

One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know

Part 2 – Tips Excluded from Income Certain employees and independent contractors may be eligible to deduct tips from their income for tax years 2025 through 2028 under provisions included in the One Big Beautiful Bill. The deduction is capped at $25,000 per year and begins to phase out at $150,000 of modified adjusted gross […]

Author: Scott H. Novak

Link to post with title - "One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know"
One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know post image

One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know

Part 1 – Overtime Pay and Income Tax Treatment Overview This Firm Insights post summarizes one provision of the “One Big Beautiful Bill” related to the tax treatment of overtime compensation and related employer wage reporting obligations. Overtime Pay and Employee Tax Treatment The Fair Labor Standards Act (FLSA) generally requires that overtime be paid […]

Author: Scott H. Novak

Link to post with title - "One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know"
New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business post image

New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business

In 2025, New York enacted one of the most consequential updates to its consumer protection framework in decades. The Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Act) significantly expands the scope and strength of New York’s long-standing consumer protection statute, General Business Law § 349, and alters the compliance landscape for New York […]

Author: Dan Brecher

Link to post with title - "New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business"
How to Reduce Legal Risk as Your New Jersey Business Grows in 2026 post image

How to Reduce Legal Risk as Your New Jersey Business Grows in 2026

For many New Jersey businesses, growth is a primary objective for the New Year. However, it is important to recognize that growth involves both opportunity and risk. For example, business expansion often results in complex contracts, an increased workforce, new regulatory requirements, and heightened exposure to disputes. Without proactive planning, even routine growth can lead […]

Author: Ken Hollenbeck

Link to post with title - "How to Reduce Legal Risk as Your New Jersey Business Grows in 2026"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!