Student loan debts survive bankruptcy and trigger wage garnishment and license revocation

Evidence

With mortgage defaults, banks seize and resell the home. But if a degree can’t be sold, that doesn’t deter the banks. They essentially wrote the student loan law, in which the fine-print says they aren’t “dischargeable.” So even if you file for bankruptcy, the payments continue due. Hence these stern words from Barmak Nassirian of the American Association of College Registrars and Admissions Officers. “You will be hounded for life,” he warns. “They will garnish your wages. They will intercept your tax refunds. You become ineligible for federal employment.” He adds that any professional license can be revoked and Social Security checks docked when you retire. We can’t think of any other [debtor] statute with such sadistic provisions. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 384

Categorization

• SEED: An essay angle: the student-loan regime as the archetypal example of a debt form with no exit — contrasting it with mortgages where the collateral can be seized and the debt closed.
• XREF: connects to: Debtor prisons have been revived through debt-collection lawsuit traps — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 370; Student loan discharge requires proving ‘certainty of hopelessness’ in repeated court appearances — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 383; Student-loan deferral programs compound debt by capitalizing unpaid interest — Dorothy A. Brown, The Whiteness of Wealth: How the Tax…, 309 (+2 more)

Broader Connections

• Student loan discharge requires proving ‘certainty of hopelessness’ in repeated court appearances #responds-to (0.85) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 383
• Student-loan deferral programs compound debt by capitalizing unpaid interest #expands (0.80) — Dorothy A. Brown, The Whiteness of Wealth, 309
• Income-based repayment plans inflate black student debt by accumulating unpaid interest #expands (0.75)
• Formal damages remedies structurally undercompensate debtors inside an implicit capital market. #qualifies (0.70) — Lisa Bernestein, Opting out of the Legal System, 155