Your student loan bill is due

Summary

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Today, Explained – “Your student loan bill is due”

Date: January 13, 2026
Hosts: Noel King, Sean Rameswaram
Guests: Chris Quintana (USA Today investigative reporter), Jason Uliano (University of Utah law professor), Multiple student loan borrowers

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Overview

This episode unpacks the looming realities for millions of Americans as federal student loan collections ramp back up, focusing on wage garnishment, the emotional and financial toll on borrowers, and a surprising myth-busting revelation about discharging student loans through bankruptcy. The episode features personal stories from borrowers, reporting insights, and legal analysis, aiming to explain the shifting policies and their real-life impacts.

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Key Discussion Points & Insights

1. The Restart of Student Loan Collections

• Background: After a years-long pandemic pause, federal student loan payments and collections are resuming.
• Key Policy Change: Starting next month, the federal government will restart collection on defaulted loans, with wage garnishment being implemented as a major tool.
  • Wage garnishment: Up to 15% of disposable income can be taken from paychecks of those in default (03:10, Chris Quintana).
  • Who’s affected: Initially about a thousand borrowers, but number will grow.

“They can seize your tax refund. They can seize Social Security benefits. They can also garnish your wages."
— Chris Quintana (02:32)

2. Borrower Struggles and Personal Accounts

• Borrowers voiced anxiety around the impossibility of repayments amid high living costs.

  • Quote: “We are working. Some of us have second jobs, and we want to pay our student loans. We're trying, and yet we're getting nowhere.” (03:10, Borrower 1)
  • Payments resuming as high as $600/month for some, pushing them toward certain default.

• Consequences: Delinquency and default dramatically impact credit scores, affecting car loans, mortgages, and more (04:58).

3. Scope of the Problem

• Numbers:
  • 5.5 million in default
  • 6 million more delinquent

"There are degrees to this... delinquency... and then default is like the next level. That is kind of when you haven't paid for 270 days. Plus, roughly 5.5 million people are in default."
— Chris Quintana (04:11)

4. Guidance for Borrowers in Trouble

• Case Study: Lexi from Michigan, who owes $17,000 but never completed her degree, hasn’t paid or checked in years due to pandemic forbearance.
• Expert advice:
  • Immediately contact your loan servicer or check studentaid.gov for your account status.
  • Options include payment plans, settling debts, or income-based repayment.

"There's not a lot of benefit in waiting to take action."
— Chris Quintana (08:10)

5. Economic Ripple Effects

• Wage garnishments and credit downgrades of millions could reduce consumer spending and further constrain the U.S. economy.

"It's not hard to think what impact that will have... it affects people's ability to spend recreationally, it affects their ability to spend on things that they need..."
— Chris Quintana (09:02)

6. Changing the System: Front-End Reforms

• Capping Federal Loans:
  • New federal caps: $100,000 total for most graduate programs; $200,000 for law/medicine; $50,000 annually (10:19).
  • Aim: Prevent schools from charging whatever they like knowing unlimited loans will be issued.
• Private Lending Risk:
  • Cap may push more students to risky, less-protected private loans.
• Pell Grants for Short Programs:
  • Pell grants now available for shorter, vocational or trade programs (11:49) in hopes of providing less burdensome pathways to careers.

7. Busting the Bankruptcy Myth

Guest: Jason Uliano, University of Utah S.J. Quinney College of Law

The Myth

• Common wisdom: “Student loan debt can’t be discharged in bankruptcy.”
• Reality (2026): With new federal guidelines, the large majority of bankruptcy filers who seek loan discharge are successful.

“The most recent data I have is that 87% of the student loan debtors who are following this new process... successfully discharged their student loans.”
— Jason Uliano (16:32)

Historical Reason

• Restrictive laws created in the 1970s-80s due to concern about abuse—wrongly labeling borrowers as “fleece Uncle Sam” types (18:15).
• Required proof of “undue hardship” for discharge, a notoriously high bar with a three-part test: inability to pay now, unlikely to improve, and good-faith effort to repay before (19:59).

What Changed

• 2022 Guidance: Department of Justice and Department of Education now less adversarial, actively screening for borrowers who clearly meet the hardship standard and not contesting those cases (20:39).
• Result: Success rate for discharge up from 40% (2007) to 87% (latest data).

Who Can Succeed?

• Bankruptcy filers who genuinely can’t repay and meet the hardship test.
• Not an option for every borrower, but much more accessible than commonly believed.

Credit and Moral Stigma

• Discharging loans in bankruptcy doesn’t worsen credit (already affected by bankruptcy itself).
• Urges to view bankruptcy as a “fresh start,” not a moral failing (23:25).

“The Supreme Court has said for the past hundred years... it's designed to give honest but unfortunate debtors a fresh start at life.”
— Jason Uliano (23:25)

On Responsibility and Fairness

• The system isn't about letting everyone off the hook, but providing relief to those truly crushed by debt, where fees and interest make repayment impossible.

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Notable Quotes & Memorable Moments

• Student Borrower's Reflection:
  “Thank goodness I don't have kids... there's no way I could pay on my student loans, pay my rent, pay for groceries. No way.” (00:45)

• Economic Impact Summary:
  “There are millions of Lexis... it's going to be substantial.” (09:02, Chris Quintana)

• Legal Surprise:
  “I have actually heard this a thousand times in my life. Your student loans are not bankruptible... so if you're telling me 87% of people who are trying this are succeeding, something happened here.” (17:10, Noel King)

• Myth Busting Summed Up:
  “Historically it's been thought that you can't get out of your student loans by declaring bankruptcy. But factually on the ground, the empirics paint a very, very different picture...” (16:32, Jason Uliano)

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Timestamps for Key Segments

• [02:03] – Chris Quintana explains the new federal wage garnishment program.
• [03:10] – Borrower stories highlight the impossible math of repayment.
• [04:08] – Discussing delinquency vs. default; scope of the problem.
• [05:40] – Lexi’s question: what now if I haven’t paid since the pandemic?
• [06:06] – Chris Quintana's advice: what to do if you’re lost or behind.
• [09:02] – Broader economic impacts of mass borrower distress.
• [10:19] – New federal lending caps and the push toward trade programs.
• [15:59] – Listener voicemails of six-figure student debt burdens.
• [16:32] – Jason Uliano debunks the bankruptcy myth and explains new policy.
• [19:59] – The “undue hardship” test for bankruptcy described.
• [20:39] – What’s changed: the new, much more accessible bankruptcy process.
• [22:29] – Who qualifies now, and what the process looks like.
• [23:25] – On credit, stigma, and the true purpose of bankruptcy.

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Takeaways

• The federal government is stepping up student loan collections, with wage garnishment looming for those in default—even as millions struggle to pay basic bills.
• New policies are capping graduate federal loans and pushing alternative, less expensive credentials.
• Longstanding beliefs about the impossibility of discharging student loans via bankruptcy are outdated. The majority of bankruptcy filers who apply are now succeeding—an “unprecedented” shift.
• The combination of rising defaults and evolving policies will have significant, uncertain effects on both individuals and the broader economy.

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For listeners caught in the maze of student debt:

• Check your loan status ASAP (studentaid.gov).
• Don’t wait to seek repayment options if you’re in trouble.
• If facing bankruptcy, know that student loan relief is more attainable than you’ve heard.
• Remember: There’s help, and there are new paths forward—even through bankruptcy.

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Transcript

[Noel King]

The US Is having a conversation about whether so many young people really need to be going to college. It means you are a far right authorization on you. Oh my God. Or whether options like trade school and apprenticeships offer just as good a future with often much less debt. Unfortunately, we're having this conversation too late for the estimated 42 or 43 million people who hold student loan debt, more than 5 million of whom are in default, and who as of next month may see the federal government begin to garnish their wages while they're just trying to live.

[Student Loan Borrower 1]

Thank goodness I don't have kids. I mean, I love kids, but there's no way, no way I could pay on my student loans, pay my rent, pay for groceries. No way.

[Noel King]

Coming up on Today Explained from Vox what it means that your student loans are coming due. Support for today's show comes from Crucible Moments, a podcast from Sequoia Capital. Perhaps you think if you have a good idea and work hard, success is inevitable. The truth is, according to Sequoia Capital, that almost every company, no matter how brilliant the idea, no matter how steadfast the founders, will encounter unthinkable obstacles that.

[Chris Quintana]

Can make or break them.

[Noel King]

Unthinkable, no less. You can listen to Crucible Moments and hear about those unlikely triumphs or over those unthinkable obstacles at Supercell Palo Alto Networks. So much more. Check out cruciblemoments.com or listen wherever you get your podcasts.

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[Student Loan Borrower 2]

This is TODAY Explained.

[Noel King]

I'm Noel King with Chris Quintana. He's an investigative reporter at USA Today who writes about student loans and the way that debt affects borrowers lives. All right, Chris, so we know that the federal government wants people to pay their student loans back and it has a new plan to force them to to do that. What's the plan?

[Chris Quintana]

This is a continuation of something that the Education Department said that they were going to do in April. In case you missed it, we will restart collections of student loans in default.

[Noel King]

We will not force American taxpayers to.

[Chris Quintana]

Take on the debts that are not theirs. And so as part of their desire to make borrowers pay their debts. They have a couple of tools available to them, right? They can seize your tax refund. They can seize Social Security benefits. They can also garnish your wages. And so what we're looking at now is the implementation. Implementation of the federal government garnishing wages. That's up to 15% of your disposable income. And this only applies to borrowers who haven't paid their debts in a long time. So to start, it's about a thousand borrowers who've defaulted on their student loans will. Will have their wages garnished. That number is expected to grow throughout the year.

[Student Loan Borrower 1]

Like, we are working. Some of us have second jobs, and we want to pay our student loans. We're trying, and yet we're getting nowhere.

[Student Loan Borrower 2]

That interest rate, it has to come down. It's impossible to pay that. Like, especially with a recession, inflation and all the other things, life, expenses, you name it. Something gotta get.

[Student Loan Borrower 1]

My student loans are gonna kick back in in May, and my payment will be $600 a month based on my income. So I will absolutely default on those loans.

[Chris Quintana]

What I will say is that borrowers do have some timeline before this actually happens, right? They're supposed to get 30 days worth of notice before their wages actually start to get garnished. And they have options when that does happen. Right. They can try to come up with a payment plan. They can try to settle their debts, or they can request a hearing and try to tell the federal government why they can't pay these debts at this time or why they deserve more. More time to kind of get their accounts in order.

[Noel King]

How many people are behind on student loan payments? Do we know?

[Chris Quintana]

Yes. And it's kind of tricky. There are degrees to this, right? So the federal government has, like, two broad buckets, I would say you have delinquency, and that's where you've missed a payment.

[Student Loan Borrower 2]

Right.

[Chris Quintana]

And so anyone who misses a payment on their federal student loan is considered delinquent. But default is like the next level. And that is kind of when you haven't paid for 270 days. Plus, roughly 5.5 million people are in default. About 6 million more are delinquent. Yeah, I owe nearly $300,000 in student loans. So, yeah, I totally am sweating it.

[Student Loan Borrower 3]

I am drowning in student debt. I have over $75,000 in student debt. Just found out that my estimated student loan debt payoff is in the year 2049. 2049.

[Chris Quintana]

And what starts to happen there is. There's a variety of effects, right? But the biggest one that I think folks would see most immediately is the impact of their credit score. Right. Your servicer, your student loan servicer can, to the credit agencies so and so hasn't paid their student loan debts. Right. And that can have a lot of cascading effects, right. Like when you think about your credit, that impacts your ability to take out a car loan, that impacts your ability to eventually take out a mortgage. And it can just squeeze what kind of life a person lives.

[Noel King]

All right, so we heard from listeners about this, Chris, and I want to play a call from one of them. Her name is Lexi in Michigan. Take a listen to this.

[Student Loan Borrower 3]

I've got about 17 grand in student loans and I actually don't even have a degree. I haven't even really thought about my student loans for the past. You know, I think since the pandemic, whenever I had last adjusted, they told me I didn't need to pay anything. And I haven't really, I really looked at it since. Am I screwed?

[Chris Quintana]

Oh, gosh, I feel for Lexi. And first I want to say I don't think she's screwed, but, but her situation is, is not dissimilar to a lot of borrowers. You know, the federal government under both administrations likely has a role in this. Right. I mean, the pandemic pause started in March 2020, and that was when President Trump was in office for the first time. Right.

[Student Loan Borrower 2]

Today, Secretary Divorce has directed federal lenders.

[Noel King]

To allow borrowers to suspend their student.

[Chris Quintana]

Loans and loan payments without penalty for.

[Noel King]

At least the next 60 days.

[Student Loan Borrower 2]

And if we need more, we'll extend.

[Chris Quintana]

That period of time over his administration, the tail end of that administration. And through the Biden administration, the pause was extended multiple times. Right. That all came to a head finally, finally ended in October 2023. But the Biden administration gave borrowers about a one year period, it was on ramp period to kind of help them get back up to speed with paying their loans. Right. So it was, it wasn't that loan, your loans weren't due. It was just that the consequences for not paying those loans weren't in effect. Right. So you, if you missed a payment at that point, it wouldn't be reported to a credit agency. Right. The federal government hadn't started its collections process. And so, you know, it's, it's understandable that borrowers had received all this information and didn't know actually where, where things stand now. Right. And so all that said, I feel for Lexi and say that the first step to figure out kind of where she is and what she owes is to get either if she knows her servicer, get in touch with her servicer and if not, you can always go to studentaid.gov that is the kind of the central housing for federal student loans. It's unlikely that the federal government is her direct servicer, but her account through the federal government would tell her who her servicer is, how much she owes, and like the last time she had made a payment. Right. Also through that she can request it depending on how far behind she is, you know, an attempt to get onto like an income based repayment program or something else to kind of get up to speed with her load. So she's not screwed, but I would say that there's not a lot of benefit in waiting to take action.

[Noel King]

Yeah, I appreciate your, your optimism here. Telling Lexi she's not screwed is good, but actually her Lexi's call made me think about something which is that this is a young woman who is already navigating financial complexity like tens of millions of other young Americans and not so young Americans. Right, Right. People these days are having trouble affording their rent, they're having trouble paying the mortgage, they're having trouble with car loans, they're having trouble buying food. The Trump administration says, hey, millions of you are behind and now we're going to ask your employers to take some money out of your paycheck. What does this actually mean for the American economy more broadly?

[Chris Quintana]

There are millions of Lexis. Right. And when you think of millions of young people whose credit scores are being devastated by the fact that they haven't paid their student loans, who may in fact, then on top of this credit score devastation, see the federal government reaching into their paycheck to take up to 15% of their post tax income. It's not hard to think that the what impact that will have in the economy that affects people's ability to spend recreationally, it affects their ability to spend on things that they need in their lives. And so, I don't know, it's hard to say exactly what the effect is, but it's going to be substantial.

[Noel King]

The business of student loans has been called out for years now as kind of a dirty business. Right. You sign a piece of paper when you're 18 years old, you don't know what the hell you're signing, you don't know what you're committing to. And then you find yourself 22, 25, 27, 35, and you are deep, deep in debt. Debt and often the interest keeps growing. Right? Right. Has the Trump administration, which seems to want, in some ways, really to put an end to this. Has the Trump administration said anything about changing things on the front end? Not allowing lenders to loan hundreds of thousands of dollars to young people, Stopping this before it starts?

[Chris Quintana]

Yeah, you know, I'm glad you asked that, because I've written about this recently and actually the federal government is planning to institute new limits for graduate programs. And I know this seems kind of n but graduate loans, they've jumped in recent years. They make up nearly half of new loans, dispersed. And so limiting grad programs is going to have a big impact both on students ability to pay for college and on college operations. Prior to this, you could borrow up to the cost of a graduate program, which a lot of people have argued let schools kind of set their own price with the knowledge that the federal government would loan students however much money they needed to get through their program. Right. The federal government is now saying we're not going to do that anymore. For graduate programs, the total amount that you can borrow is $100,000 for professional programs. This is like law degrees, this is medical degrees. That cap is now set at 200,000 in total and about 50,000 annually. There is a lot of concern that this will limit people's ability to attend school. And it may also drive up private lending, which doesn't have the same protections that federal lending has. Right. You can get generally lower interest rates through the federal government and you also have protections through a federal loan that you don't have through private loans. Right. Like the pandemic pause that only applied to federal student loans. Private borrowers still had to pay on those loans. They got a little bit of reprieve, but they were paying when federal student loan borrowers generally were not. I think the Trump administration is trying to address debt in its own ways. Right. They're also trying to get people to go to short term programs.

[Student Loan Borrower 2]

Right.

[Chris Quintana]

So they for the first time have opened up Pell grants, which are awards generally geared towards low income students, but they had been kind of for longer programs generally. Now they're saying you can do programs that are 16 weeks or so. And the hope there is that a Pell Grant, you don't have to repay it. Right. And so maybe the idea is like you do a short program, you get into the trades and you just bypass like the higher ed system altogether. Whether or not that's effective remains to be seen. Like a degree really opens a lot of doors for people. Generally, the earnings for a degree holder compared to someone who went to high school are higher and so it'll be interesting to see how they address this and how they keep the doors open to higher education while also trying to address the ever growing student loan portfolio.

[Noel King]

That was Chris Quintana. He's an investigative reporter at USA Today. Coming up, we are going to bust a myth about student loan debt that has been around for decades and in fact, I believed it myself. Stay tuned. Sport, for today Explained comes from Chime Perhaps you think Chime is just another banking app. Chime says Chime helps you unlock smarter banking the ability to be paid two days early with direct deposit. For one, there are no overdraft fees, no minimum balance fees, no monthly fees. And Chime makes your everyday spending work harder by delivering real rewards and financial progress, I am told. Chime says you can earn up to 3.5% APY on savings and if you ever have an issue, their customer Service is available 247 and they claim you can talk to a real human. They just launched Chime Card, which offers cash back, no annual fees, no interest, no strings attached. Chime is not just smarter banking they say it is is the most rewarding way to bank. You can join the folks who are already banking for free today. It just takes a few minutes to sign up. You can go to chime.comexplained. that's chime.comexplained. that's chime.comexplained Chime is a financial technology.

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[Noel King]

Support for Today Explained comes from Mint Mobile. If you're trying to cut back on your spending, Mint Mobile says Mint Mobile can help by offering 50% off their unlimited Premium Wireless. All plans come with high speed data and unlimited talk and text delivered on the country's largest 5G network. I'm told you can even use your own phone. You can keep your number. You can keep your existing contacts. This January, plans start at [e-mail] explained. That's mintmobile.com explained. This is a limited time offer. Upfront payment of $45 for three months, $90 for six months or $180 for 12 months. Those among you who are good at math may suss out that that is $15 a month. Taxes and fees are extra. This is the initial planned term only. More than 50 gigabytes may slow when the network is busy. Capable device is required. Availability, speed and coverage vary. See Mint mobile.com. I declare today explained. We're back with Jason Uliano. He's a law professor at the University of Utah's S.J. quinney College of Law. Jason is the author of a new study, Stay with me. That found something very surprising. A majority, a large majority of people who try to wipe out their student loans via bankruptcy are actually succeeding. Jason, let's start this way. We asked our listeners to tell us about their student loan debt and we heard some real horror stories.

[Student Loan Borrower 1]

I have around $150,000 of debt from an undergraduate degree. I have $161,000 in student loans that I started accruing 20 years ago. I walked out of school about eight years ago with $120,000 in debt.

[Noel King]

People just buried in six figures of debt, not sure how they're going to get out of it. And so this inevitably opens up a question which is could they just declare bankruptcy?

[Student Loan Borrower 2]

Yeah. And so that's an option that's on the table that historically I like to think of as the myth of non dischargeability of student loans. And so historically it's been thought that you can't get out of your student loans by declaring bankruptcy. But factually on the ground, the empirics paint a very, very different picture. The most recent data I have is that 87% of the student loan debtors who are following this new process that the government adopted successfully discharged their student loans. So a very, very different story than the historical myth again that's been out there. And what a lot of bankruptcy attorneys have been telling their clients that it's just impossible. That's not true anymore.

[Noel King]

I have actually heard this a thousand times in my life. Your student loans are not bankruptible and therefore you just got to pay them off. So if you're telling me 87% of people who are trying this are succeeding, something happened here. First, go back in time and tell me why weren't student loans bankruptible once upon a time?

[Student Loan Borrower 2]

So it's a long winding history through Congress. But the short of it is in the 1970s, student loans were completely dischargeable, just like credit card debt, mortgage debt, any other type of consumer debt you can imagine file bankruptcy or student loans get wiped out. And then there was this very empirically unfounded but colorful attack that painted student loan debtors as out to game the system.

[Noel King]

There is a tendency when the student leaves school for repayment of the loan, to slip down the priority scale to number 3, 4, 5, or even lower to behind the payments on a new car stereo, a television, appliances, and or a personal loan. New York Times, October 19, 1980.

[Student Loan Borrower 2]

It was a really compelling narrative of the student loan debtor walking across the graduation stage with their diploma in one hand and the bankruptcy petition in the other. Just out to sort of fleece Uncle Sam and steal from the taxpayers and get out of the student loan debt. Empirically, that was never happening, but it was a powerful image that led Congress to step in and start chipping away and putting these hurdles to student loan debt discharged through bankruptcy. Congress has passed legislation that beginning in October, will bar discharge of the loan through bankruptcy proceedings during the first five years following a student's graduation. The New York Times, April 29, 1977. Then you couldn't do it for seven years, and then you couldn't do it ultimately indefinitely unless you met what's called the undue hardship standard that's in the bankruptcy code. And so the student loan debtors who now want to get out from under their student loan debt have to go before the judge and prove that they qualify for an undue hardship discharge. And the short of that is there's three different prongs to meet. The first is that you can't currently repay your student loans, that you don't have the funds currently somewhere sitting in the bank or through your income to pay off your debt. The second is that the situation is likely to persist into the future, that it doesn't look like you're up for a big promotion or have earning capacity that's untapped, but you're pretty sort of set in your financial situation and it's not going to improve. And the last prong is going back in time. Did you make a good faith effort in the past to actually repay any of your student loan debt? And so it has these three different temporal prongs, past, present and future, to determine whether you're eligible for a student loan bankruptcy discharge.

[Noel King]

And that makes it very difficult. And that's where I and hundreds of thousands of other people get the idea that student loans are not bankruptible. At what point does that start to change?

[Student Loan Borrower 2]

Yeah, so I've been collecting data for the past 15 years at this point. And if we go back to 2007, the success rate was 40%. And I'll emphasize, still very different than the perception that no one can ever do it. But 40% isn't a great success rate. And if we go forward to the latest data where the cases are actually resolved, it's again, that 87% success rate. The debtors who are pursuing the new process successfully get out from under their student loan debt.

[Noel King]

Why? How? What happened?

[Student Loan Borrower 2]

Yeah, so there was a recent change in 2022 where the Department of Justice came out in conjunction with the Department of Education and issued new guidance stipulating to how debtors should proceed, proceed under the bankruptcy process to prove undue hardship. Today we have breaking news out of the Department of Justice. It appears that they're going to be more lenient when it comes to opposing or recommending discharge of federal student loans in bankruptcy. Previously, it had been set up where it would be very litigious between the Department of Justice and the student loan debtor. And so you, as the debtor, would file your bankruptcy, then you would have to file what's called an adversary proceeding, which is basically suing the federal government, saying, I meet undue hardship. Then the federal government would respond. So you're basically engaged with litigation as this individual student debtor against the federal government. And it goes through this entire litigation process where the judge then ultimately determines, did you or didn't you qualify for an undue hardship discharge? That's all been revamped under the new system. And so now you still file your bankruptcy, you still make the formal request and the complaint to the court, but you sort of take this parallel side approach by filing certain documentation with the Department of Justice that gives them all the information they need to make this preliminary determination whether you do or don't meet that undue hardship discharge requirement. So they look at all of your financial information that you provide to them, and upfront, they'll tell you, we're not going to contest your discharge, or we think you don't meet the undue hard standard. So we will challenge it.

[Noel King]

Who manages to do this successfully? If we have people listening and they're like, I wonder if I might fit the bill. Who are you seeing gets the loans discharged?

[Student Loan Borrower 2]

So it's pretty much everyone who's applying at this point, everyone who's going through the process. I'll clarify. The folks who are going through this, though, are already in bankruptcy. And so it's not the fact that every student loan debtor who just has student loan debts, if they followed this, would get out from under their debts and receive the student loan bankruptcy discharge. But folks who otherwise have a need to be in bankruptcy and are filing a Chapter seven because there's debts that they can't repay, all of those folks are qualifying at this point under the Department of Justice's determination. And so very, very high success rate for folks who have just moderate financial distress that has pushed them into bankruptcy.

[Noel King]

All right, so I want to ask you, does it wreck your credit? But what I think I hear you saying is quite obviously you are already declaring bankruptcy. Bankruptcy wrecks your credit. So filing to discharge your student loans doesn't particularly add anything into the mix. It doesn't add anything different. It's just another aspect of the bankruptcy.

[Student Loan Borrower 2]

Yeah, that's exactly right. And I think there's this common misconception and a very unfortunate moral condemnation of folks who file bankruptcy. And one of the things that I would want to leave your listeners with is that that shouldn't be the case at all. Bankruptcy is a tool that's there to help you get out from crippling debts that are otherwise impeding your ability to succeed. And so it's this very, very useful tool. And I'll emphasize the Supreme Court has said for the past hundred years, repeatedly that it's designed to give honest but unfortunate debtors a fresh start at life. And so it shouldn't be viewed in this morally blameworthy way. There's all sorts of reasons that people end up in situations, financial situations they can't get out from under that aren't morally blameworthy for them. And so it's a very useful tool when circumstances end up in a way where the debtor just can't repay their debts.

[Noel King]

I appreciate what you're saying, but I want you to wrestle with an argument that I've heard, I heard it a lot during the Biden administration, which you won't be surprised by. Student loans are different than a credit card loan. The lender is the federal government, oftentimes, which means it's the American taxpayer that lent you the money. And you know, if you went off and went to college and ended up in debt, well, you know, somebody you went to high school with didn't get the chance to go to college, didn't end up in debt, but also doesn't have a college degree. You person who went to college, you should be responsible for yourself because America put you through school. What do you think about that point of view?

[Student Loan Borrower 2]

Yeah, so I understand the point of view. And to add to it, there's tons of folks who did and then paid off their complete student loan debt and sort of struggled through that. And so this isn't certainly isn't something to be taken lightly. And I'm not advocating there's 40 million student loan debtors out there today. I'm not advocating that they all rush to the bankruptcy courts and discharge their student loans. It truly is for people where bankruptcy is the best step for them to get out from underneath their debts because there's no other plausible pathway. Many of those folks started off with just 10 or $15,000 in student loans, but it was interest and penalties and other fees and late payments that accrued and ramped up. And despite them making payments over a series of five, six, ten years even, they now have many multiples of the amount of student loan debt that they actually took out to pay for their education. And so that's where it's really best beneficial for those folks where deferments and forbearances and late fees have just made the initial loan payment that seemed reasonable become something that's astronomical and is hindering their ability to actually move on with their lives and become productive members of society.

[Noel King]

Jason uliano of the S.J. quinney College of Law at the University University of Utah, Hadi Mwagdi and Kelly Wessinger produced today's show. Jolie Meyers edited, Patrick Boyd and David Tadashore are our engineers. Andrea Lopez Cruzado is our fact checker. Thanks to all of you who called in and told us about how you're dealing with student loan debt. I'm Noel King. It's TODAY Explained. Support for today's show comes from Quo. When you're a business owner, missed calls can mean missed opportunities. If you're looking for a way to to not miss calls, you might want to try Quo. Quo spelled Q U O is a business phone system that says they make sure you never miss an opportunity to connect with a customer. You can use Quo from an app on your phone. Plus your whole team can share one number and collaborate on calls and texts, kind of like a shared inbox. Quo is not just a phone system, it's a smart system. They say their built in AI logs those calls, writes those summaries, even sets up those next steps. And if you can't answer the the phone personally, Quo has an AI agent that can qualify, leads, route calls to the right person and make sure that no customer is ever left hanging. That's why Quo says over 90,000 businesses, both big and low are already using quota power their communications. You can make this the year where no opportunity and no customer slips away. You can try this for free. Plus get 20% off your first six months when you go to quo.com explained. That's quo.com explained quo no missed calls, no missed customers.