**New Department of Education Guidance Makes It Easier to Discharge Student Loans in Bankruptcy**

The Department of Education (DOE) recently issued new guidance that makes it easier for borrowers to discharge their student loans in bankruptcy. The guidance sets forth a new process for borrowers to apply for bankruptcy discharge, and it provides more flexibility for bankruptcy courts to grant discharges.

Under the new guidance, borrowers can apply for bankruptcy discharge by filing an "attestation form" with the bankruptcy court. The attestation form requires borrowers to provide information about their income, expenses, and ability to repay their loans. If the Department of Education finds that the borrower meets their new and easier requirements for bankruptcy discharge, they will agree to discharge the borrower's loans.

The new guidance is a significant change from the previous policy, which made it very difficult for borrowers to discharge their student loans in bankruptcy. Under the previous policy, borrowers had to prove that they were unable to repay their loans due to "undue hardship." This was a very high standard to meet, and few borrowers were able to do so, or even try due to the high cost of litigation.

The new guidance makes it easier for borrowers to meet the undue hardship standard by providing more flexibility for bankruptcy courts to grant discharges. For example, bankruptcy process will now consider the borrower's current income when determining whether the borrower is unable to repay their loans.  The new guidance also calculates the monthly payment based on a 10 year repayment plan at current interest rates (as opposed to the IDR or deferrrment payment amounts).  This is a significant change, as it makes it much easier for borrowers to show they cannot the monthly payment.  

The new guidance is a welcome change for borrowers who are struggling to repay their student loans. It is estimated that over 40 million Americans have student loan debt, and the average borrower owes over $30,000. The new guidance will make it easier for these borrowers to get relief from their debt, which will help them to improve their financial situation and achieve their financial goals.

If you are struggling to repay your student loans, you should contact an attorney to discuss your options. The new guidance may make it possible for you to discharge your loans in bankruptcy, and an attorney can help you to understand the process and prepare the necessary paperwork.