I’m wondering if there is anyway to get out of a school loan?

I went to an institute where they promised to help me find a job once I was done. Well no one has ever helped me. I did qualifiy for a forbearance but here I am stuck with this debt that I cannot afford. Is there anyway to cancel a loan completely? Also, I do have the school’s job placement page here on my computer and they did not follow through with what is on their page.

Asked on June 3, 2012 under Bankruptcy Law, Massachusetts


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

It is almost impossible to discharge, or eliminate, a student loan in bankruptcy, if it is a federally backed or guaranteed loan, as almost all are: the law only allows such loans to be discharged if the filer can demonstrate "undue hardship." Undue hardship in this case means essentially not only that paying the loans now reduces you to poverty, but that there are effectively no prospects or chance that your economic situation will improve in the future. (I.e. you have to show it's pretty much impossible that you'll get a job, or a raise, or whatever it would take to do better.) My understanding is that less than 1 in 100 of the people who try to discharge their student loans in bankruptcy succeed.

If you can show that the school has either breached its contractual obligations to you, or has not honored promises or representations which it made (such as in regard to job placement) in order to induce you to attend it, then you may have a lawsuit against the school and may be able to recover compensation. If the school truly is not doing things, in regards to placement, which it claimed it would, you should consult with an attorney in detail about the situation.

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

From what you have written with respect to the school loan that you received, there really is no legal basis for getting out of the school loan that you received where you received the benefits with respect to it other than possibly filing for bankruptcy protection. Even the possible filing for bankruptcy protection may not under federal and state law discharge your debt for the loan you received. I suggest that you consult further with a bankruptcy attorney concerning your question.

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