The Essay Scholarship Contest sponsored by our law office has been in existence since 2014 and has evolved since then from a yearly contest with one winner to a bi-annual contest with three winners per contest. Currently we award $10,000. in combined prizes per year to six deserving contestants. A look back at some of the winning essays can give current contestants inspiration and ideas for their own essays. We have also posted the essays and photos of the winners to give encouragement to potential contestants to enter our contest. The goal of the scholarship is to challenge and to get the best ideas from students about how our society should deal with current issues of debt relief in terms of laws and policies that are effective, practical, fair and just.
This Former Spring 2022 Essay Contest is Now Closed. It was Open Until May 15, 2022. Winners have been selected and their winning essays and award winners have been posted.
Before 1976, many debtors in bankruptcy proceedings could discharge student loan debt, whether public or private. In 1976, Congress amended the Higher Education Act of 1965 to include Section 439A, which makes student loans non-dischargeable in bankruptcy unless (a) more than five (5) years have passed since the repayment plan was entered into, or (b) not discharging the loans would cause the debtor and their dependents an undue hardship. In 1978, Congress passed the Bankruptcy Reform Act, commonly referred to as the Bankruptcy Code, which has been periodically amended to further limit a debtor’s ability to discharge student loan debt. The most recent changes to the code were passed in 2005 when Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”). Under BAPCPA, Congress excepted certain student loans from discharge, namely, (i) if they were made, insured or guaranteed by the government, (ii) made under any loan program funded in whole or in part by the government or nonprofit institution, or (iii) private loans which are considered “qualified education loans”.
Currently, the majority of Bankruptcy Courts apply the three-pronged “Brunner Test”, established in Brunner v. New York State Higher Education Services Corp. (S.D.N.Y. Oct. 14, 1987) to discharge a student loan based upon an “undue hardship”. To establish an undue hardship under Brunner, a debtor must show (1) based upon debtor’s current income and expenses, they cannot maintain a normal standard of living for themselves or their dependents if forced to repay the loans, (2) the state of affairs is likely to persists for a significant portion of the repayment period, and (3) the debtor has made good-faith efforts to repay the loans. A minority of circuits apply the “totality of the circumstances test” which does not require the third-prong in Brunner.
According to the Education Data Initiative, approximately $43.2 million American student borrowers are in debt by an average of $39,351 each. Currently, student loan debt in the United States totals $1.75 trillion and grows six (6) times faster than the nation’s economy. Id.
(1) both the history and current bankruptcy court policies regarding the dischargeability of student loan debt;
(2) how this policy could be changed to balance the competing interests of alleviating the burden imposed on student borrowers versus preventing abuse by borrowers; and
(3) to what extent should bankruptcy law and the bankruptcy courts be used to resolve the student loan dilemma, and how can bankruptcy policy be part of larger national policy approach to remedy the crisis in funding higher education.
The essay should not exceed 2,000 words and should use facts and references to support an argument for a position
The Previous Fall 2021 Scholarship Essay Contest – (See Winning Essays and Winners Below)
The 2021 Fall Essay Contest dealt with the ongoing foreclosure and eviction moratorium in New York State, that lasted almost two (2) years, from March 2020, until January 15, 2022. In the Fall of 2021 the federal moratoriums had already to a large extent ended and were being continued selectively on a state by state level, depending on the politics and conditions in that state. Certain states including New York State continued the moratoriums on a state level. It was hard to tell in the Fall of 2021 for how long New York State would continue its moratoriums in that there were many cost versus benefit issues as the pandemic continued and many questions as to how long these moratoriums could realistically continue. On the one hand Covid-19 did have a disproportionate affect on New York State and it was not an appropriate time for vulnerable persons to worry about losing their homes. on the other hand there were real questions whether the moratoriums were the appropriate way to protect persons affected by Covid or whether they were well intentioned but overly broad solutions that could potentially cause harm to marginal landlords while protecting many people not truly hurt by Covid.
The wording of the essay topic dealing with the ongoing New York State moratoriums on evictions and foreclosures is below. We received many excellent essays. The three students winning first, second and third place for their essays are shown below with a link to their essays.
Topic of Previous Fall 2021 Scholarship Essay –
“During the last year, due to the Covid-19 pandemic and interruptions to our economy, many states and the federal government imposed foreclosure and eviction moratoriums that protected non-paying mortgage borrowers and tenants. While this protection in many cases was needed to protect persons in financial hardship stay in their homes during a pandemic, it at the same time caused hardship for mortgage holders and landlords who could not enforce payment obligations. Please discuss whether and under what circumstances such foreclosure and eviction moratoriums can and should be imposed by the federal and/or state/local governments and whether and under what circumstances such moratoriums should continue. Please cite specific laws and references in developing your arguments.”
Congratulations to our Previous Fall 2021 scholarship first winner, Stephanie Adams!
The 2021 Spring Essay Contest dealt with the newly enacted Subchapter V to Chapter 11 of the Bankruptcy Code and how it may be helpful for small business debtors seeking to reorganize their finances in better way than the former provisions of Chapter 11 dealt with small business debtors. Subchapter V was passed by Congress in late 2019 but in March of 2020 it was expanded as part of the CARES Act legislation which broadly dealt with the Covid-19 pandemic. This was an exciting and timely topic that in part addressed reorganizations for some of the hardest hit businesses during the global pandemic, small businesses. We received many excellent essays. The three students winning first, second and third place for their essays are shown below with a link to their essays.