Robert Ambrogi Blog
According to Upsolve, a nonprofit company whose technology helps low-income individuals file for bankruptcy for free, Americans owe $1.77 trillion in student loan debt — 93% of it to the federal government.
Since 2017, Upsolve’s debt relief tools have helped more than 13,000 individuals erase more than $750 million in debt. But, due to the vagaries of bankruptcy law, it was not able to help them get relief from student loan debt.
Jonathan Petts, cofounder and CEO, says that some 32% of Upsolve’s users had significant student loan debt. Often, that meant that, even after Upsolve helped them go through a Chapter 7 bankruptcy, they still carried thousands of dollars in student loan debt and were unable to fully realize a fresh start.
That all changed last week with Upsolve’s launch of a new student loan discharge tool that it developed in partnership with Philadelphia Legal Assistance and with funding from a 2023 Legal Services Corporation Technology Initiative Grant.
Already, 102 cases have been filed using the tool to seek relief from student loan debt, with nine approved and 93 more still in progress.
Hardship Exemptions
At a recent launch event for the new tool, Ben Jackson, chief product officer at Upsolve, said that development of the tool was enabled by a November 2022 guidance published by the U.S. Department of Justice on the discharge of student loans in bankruptcy cases.
Prior to the guidance, a lack of clear standards and inconsistent interpretations of the law made it difficult to obtain relief from student loan debt in bankruptcy cases. But with the guidance came clear standards for obtaining a so-called hardship exemption, and with clear standards came the ability of Upsolve to build a tool around those standards.
At the launch event, Jackson said that this work is personal to him. Before ever graduating from Chicago-Kent College of Law and joining Upsolve, he went through a period during which he fell into deep debt and was able to climb out only through bankruptcy. Now, among the experiences he lists on his LinkedIn profile, he includes self-represented litigant in U.S. Bankruptcy Court, impoverished gig worker, and bereaved cofounder. In short, he’s been there, done that.
Guided Interview
Demonstrating the student loan relief tool, Jackson said that it is an add-on to Upsolve’s core Chapter 7 relief tool. For debtors who are filing for bankruptcy and also have outstanding student loans, it walks them through the additional steps required for discharge of those loans.
The tool starts with a set of a few simple questions to determine if the debtor is eligible for the hardship exemption. If so, it guides them through the process of gathering and providing the information they need, while also educating them at each step as to what is required and why.
It specifically helps them obtain and pull in all the information they need about their debts, including their report from the National Student Loan Data System, which Jackson says can otherwise be one of the hardest parts for a pro se filer.
It then compiles all that information into the forms needed to file for the hardship exemption, including the complaint to initiate the adversarial proceeding for the student loan discharge and the attestation that sets out the arguments for why the discharge should be allowed.
The user also gets a detailed checklist that specifies the steps to take to file and follow through on the documents.
Sense of Freedom
At the launch event for the tool, the speakers included three individuals who used the tool to obtain relief from their student loan debt. One, a single mom, said the relief has given her such a sense of freedom and made her feel ready for the next chapter in her life.
Another talked about her sleepless nights and calls to multiple law firms wanting unaffordable fees and scam debt-relief sites before she used Upsolve’s tool. Still another said she initially thought Upsolve was just another scam, but felt she had nothing to lose and at least it was free.
If you want to hear more about the development of this tool, listen to the recent episode of the Talk Justice podcast, Upsolve’s New Student Debt Relief Tools. Host Ron Flagg, president of the Legal Services Corporation, interviews Jackson, Upsolve’s chief product officer, together with Jonathan Pyle, contract performance officer at Philadelphia Legal Assistance, who was instrumental in conceiving of the tool and obtaining the LSC grant to build it.