"Undue Hardship" and Uninsured Americans: How Access to Healthcare Should Impact Student-Loan Discharge in Bankruptcy

Student-loan debt has grown to unprecedented heights. Contributing to the severe burden imposed by these debts is the Bankruptcy Code’s unique presumption that they are not dischargeable. To overcome that presumption, a debtor must establish that repayment of her loans would constitute an “undue hardship.” This Essay examines the disagreement among bankruptcy courts that have interpreted the “undue hardship” standard in situations where a debtor is unable to afford health insurance—a common occurrence among the economically disadvantaged. After examining recent healthcare reforms, I argue that Congress has expressed a judgment that all Americans should obtain minimum essential healthcare.

Though this goal remains unrealized, it should inform courts’ “undue hardship” analysis, and debtors who cannot obtain healthcare while repaying loans should be entitled to a bankruptcy discharge. This reform has been made even more urgent by the economic disruptions and increased healthcare costs imposed by the ongoing COVID-19 pandemic.