The Effect of Switching from a Brunner to a Totality Test for Student Loan Bankruptcy

Student loans are making headlines, whether they’re about the size of the debt, the companies collecting the debt, or the hardships faced by recent graduates paying their debt. Earlier this week, MarketWatch published an article highlighting two Supreme Court petitions filed by men trying to discharge their student loan debt, bringing the issue front and center yet again.

Both cases involve borrowers who have more than $200,000 in student loan debt – this is significantly higher than the typical debt load of $30,000. They’re asking the Supreme Court to review their cases with the intent of replacing the Brunner Test with the Totality Test when determining hardship and the ability to discharge student loan obligations. The Totality Test is a more lenient test for determining financial hardship, so it’s obvious why Robert Murphy and Mark Tetzlaff would prefer to use it. Should the Supreme Court take on these cases and provide a favorable ruling for Murphy and Tetzlaff on the use of the Totality Test, the precedent could alter a consumer’s ability to discharge student loan debt through bankruptcy, which would significantly impact tax payers, collection agencies, and future access to student loans.

On the one hand, providing students suffering from mounting student debt with greater ease of discharging their debt sounds great. It would allow these students the opportunity to have a fresh start and move on with their lives. Unfortunately, for every action, an equal and opposite reaction must occur.