As of February 14, 2024, the revised Department of Justice (DOJ) guidelines for discharging student loan debt are still under evaluation after their initial implementation in November 2022. Here's what we know:
Current guidelines (November 2022):
- Aim to make the discharge process fairer and more accessible.
- Encourage consistent treatment of student loan discharge across cases.
- Reduce the burden on borrowers trying to get discharge.
- Help identify cases where discharge is appropriate.
Key components:
- Standardized process: Provides clear expectations for discharge proceedings.
- Stipulation and recommendation: DOJ attorneys can now stipulate to facts demonstrating "undue hardship" and recommend discharge if three conditions are met:
- Present inability to repay: Borrower cannot maintain basic living standards with required repayments.
- Persistent financial hardship: Circumstances suggest this will continue long-term.
- Good faith efforts: Borrower has sincerely tried to repay in the past.
- Early indications: Initial reports suggest the new process is increasing the number of discharges.
Evaluation and potential updates:
- DOJ and Department of Education are currently assessing the first year of implementation.
- Based on feedback, future updates might further streamline the process or refine criteria for discharge.
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