As the student loan crisis continues to grow - with loans increasing 60 percent in the past five years - some individuals are unable to pay their bills. But unlike other debts, student debt cannot be relieved by declaring bankruptcy. Instead, individuals with crippling debt must prove that there is a 'certainty of hopelessness' in their future - a standard that is rarely achieved in the courts.

Why does our system punish student debt so harshly, and what can be done to alleviate the problem as student loans continue to accrue?

Ron Lieber, the Your Money columnist for the New York Times wrote about this issue:

No one keeps track of how many people bring undue hardship cases each year, but it appears to be under 1,000, far less than the number of people failing to make their student loan payments. In its most recent snapshot of student loan defaults, the Department of Education reported that among the more than 3.6 million borrowers who entered repayment from Oct. 1, 2008, to Sept. 30, 2009, more than 320,000 had fallen behind in their payments by 360 days or more by the end of September 2010. About 10.3 million students and their parents borrowed money under the federal student loan program during the 2010-11 school year.

One reason so few people try to discharge their debt may be that such cases require an entirely separate legal process from the normal bankruptcy proceeding. In addition, those who may qualify generally lack the money to hire a lawyer or the pluck to file a suit without one.

Lieber will join The Daily Circuit Monday to discuss student loans and bankruptcy. Rafael Pardo, Robert T. Thompson professor of law at Emory University, will also join the discussion.

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