# Will declaring myself bankrupt cancel my student debt? **URL:** \ **Category:** Factual Questions\ **Created:** [February 10, 2003, 3:41pm UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121 "2003-02-10T15:41:49Z")\ **Posts on this page:** 14\ **Page:** 2
**Author:** ![digitalskeeza](https://avatars.discourse-cdn.com/v4/letter/d/50afbb/32.png) [@digitalskeeza](https://boards.straightdope.com/u/digitalskeeza)\ **Post date:** [February 11, 2003, 6:09am UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/21 "2003-02-11T06:09:59Z")
> [@](#): > > \*Originally posted by Scarlett67 \* > Thank you for recognizing this, on behalf of all of us who have paid the student debt we agreed to take on and did not **welsh out of it.** (bolding mine) [hijack]Just curious as to the etymology of this particular phrase–is it derogatorily referring to some reputation of Welsh people have for reneging on promises/debts?!? If so, why is it acceptable to use that phrase, but not “Jew someone down”? Wouldn’t a Welshman take as much offense at the former phrase as a Jewish person would at the latter?[/hijack] ---
**Author:** ![wooba](https://avatars.discourse-cdn.com/v4/letter/w/aeb1de/32.png) [@wooba](https://boards.straightdope.com/u/wooba)\ **Post date:** [February 11, 2003, 7:36am UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/22 "2003-02-11T07:36:38Z")
I suspect that Scarlett67 meant to say Welch ---
**Author:** ![quicken78](https://avatars.discourse-cdn.com/v4/letter/q/919ad9/32.png) [@quicken78](https://boards.straightdope.com/u/quicken78)\ **Post date:** [February 11, 2003, 8:03am UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/23 "2003-02-11T08:03:20Z")
This is fascinating. I have a US and a UK citizenship (independent of one another). If I declare bankruptcy in the UK (with my $15,000) of debt, but I also have a PERFECT credit rating in the US, what will then happen? BTW none of my financial institutions have any idea of my differing physical addresses. Also, I don’t buy the idea of a ‘moral responsibility’. The way I view it is that I am going to be taxed WAY too much for the rest of my life (as I have been already) and ANY loophole that I can currently exploit will only act as a short-term (but significant) rebate. Since Dennis Healey raised the capital gains tax in the 70s to 99%, I do not feel the moral obligation to ‘repay taxes’ to the UK…ever. ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [February 11, 2003, 1:46pm UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/24 "2003-02-11T13:46:18Z")
> [@](#): > > \*Originally posted by e-logic \* > \*\* > > And in ethical terms, I agree that since we’ve taken the cash we have also taken on the responsibilty to honour the debt. Perhaps we ought to look on it as an investement in the future, and hopefully the £15,000 spent between us on university will pay dividends in later life. > \*\* I don’t know about the UK but a study done in Australia showed that a undergraduate degree yeilded roughly 16% Return on Investment per annum on purely economic terms. Law, med and Engineering had slighly more while arts had slighlty less. Grad school was only around 8 - 9% IIRC. ---
**Author:** ![Xerxes](https://avatars.discourse-cdn.com/v4/letter/x/d2c977/32.png) [@Xerxes](https://boards.straightdope.com/u/Xerxes)\ **Post date:** [February 11, 2003, 1:55pm UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/25 "2003-02-11T13:55:27Z")
A while ago there was a furore in the UK press when a gov’t minister defended topup fees and loans on the grounds that ‘on average’ a graduate could expect to make an extra 400,000 GBP over the course of his/her working life. Don’t quite know how they came up with that figure, but that’s the order of magnitude they’re talking about. ---
**Author:** ![Scarlett67](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/scarlett67/32/7387_2.png) [@Scarlett67](https://boards.straightdope.com/u/Scarlett67)\ **Post date:** [February 11, 2003, 3:22pm UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/26 "2003-02-11T15:22:47Z")
Sorry – I had forgotten about the derogatory bent of the term. I had never heard of this particular stereotype when I learned the meaning of the phrase, and so it sometimes slips my mind. I retract the phrase. Let’s substitute “. . . and did not try to skip out on it.” (Usage note: _welch_ is simply a variant of _welsh._) ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [February 11, 2003, 3:58pm UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/27 "2003-02-11T15:58:39Z")
You’ve got a problem with skipping?!?!?! ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [February 11, 2003, 4:52pm UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/28 "2003-02-11T16:52:28Z")
> [@](#): > > It’s interesting to get a US perspective on things. The idea of paying vast amounts for a university education is still seen as unjust by a lot of people here in the UK, as it’s not been the system in the past, but I guess to a lot of Americans (in particular) £15,000 must seem a small price to pay for univeristy qualifications… Not many people in America actually have to pay the whole shebang. Nearly everyone can get financial aid in some sort or another. Most of it is private. And even if you can’t, a college education is still open to the bright and motivated. $15,000(or its sterling equivelant) is a drop in the bucket to what it can bring you. 🙂 ---
**Author:** ![Susanann](https://avatars.discourse-cdn.com/v4/letter/s/7ab992/32.png) [@Susanann](https://boards.straightdope.com/u/Susanann)\ **Post date:** [February 12, 2003, 6:26pm UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/29 "2003-02-12T18:26:07Z")
Can you “refinance” student debt with another institution and then get it “discharged” that way? ---
**Author:** ![digitalskeeza](https://avatars.discourse-cdn.com/v4/letter/d/50afbb/32.png) [@digitalskeeza](https://boards.straightdope.com/u/digitalskeeza)\ **Post date:** [February 13, 2003, 12:36pm UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/30 "2003-02-13T12:36:36Z")
> [@](#): > > \*Originally posted by Scarlett67 \* > \*\*Sorry – I had forgotten about the derogatory bent of the term. I had never heard of this particular stereotype when I learned the meaning of the phrase, and so it sometimes slips my mind. I retract the phrase. Let’s substitute “. . . and did not try to skip out on it.” > > (Usage note: _welch_ is simply a variant of _welsh._) \*\* No, _I’M_ sorry, I didn’t intend to single you out, Scarlett…I also have never heard of this stereotype, and was really just wondering why/how “to welsh” had come into use…(couldn’t find the word origin online, other than that it comes from Welsh). I just find it interesting that welsh and gyp/gypped are so commonly used without much thought as to their meaning, while everyone is super-PC about everything else, whether it’s actually derogatory or not (niggardly, for pete’s sake!!!).[/hijack#2] And e-logic, I’m glad you decided against bankruptcy. It seemed like a Clintonesque way to get out of an obligation to me (I miss Bubba, but he was an _oily_ bastard). ---
**Author:** ![smaft](https://avatars.discourse-cdn.com/v4/letter/s/c2a13f/32.png) [@smaft](https://boards.straightdope.com/u/smaft)\ **Post date:** [February 13, 2003, 10:07pm UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/31 "2003-02-13T22:07:24Z")
> [@](#): > > \*Originally posted by Susanann \* > Can you “refinance” student debt with another institution and then get it “discharged” that way? You can pay off your student loans any time if you’ve got the money. But you’d have to find an institution willing to give you an unsecured loan large enough to cover the loans, and they’ll charge you a much higher interest rate. Of course, I’ve known people who refinance their house and use those funds to pay their student loans; they can get a lower rate and take the interest deduction on their taxes (in the U.S. at least). That wouldn’t be dischargeable in bankruptcy, but it does get rid of the student loans. ---
**Author:** ![Celyn](https://avatars.discourse-cdn.com/v4/letter/c/9dc877/32.png) [@Celyn](https://boards.straightdope.com/u/Celyn)\ **Post date:** [February 15, 2003, 12:52am UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/32 "2003-02-15T00:52:09Z")
FWIW - also dislike the “welsh” thing, as the only derivation I have read for it does indeed come from a derogatory attittude expressed by the English about the Welsh\*. BUT, sorry foks, I have enough trouble staying online these days - I can’t promise to come back with a site. I think Brewer’s "Dictionary of Phrase and Fable " would help but I doubt my ability to get to it. ☹ \*btw - even the word “welsh” is a bit annoying, I should have thought, it meaning “foreign”. HUH! ---
**Author:** ![El\_Gui](https://avatars.discourse-cdn.com/v4/letter/e/35a633/32.png) [@El\_Gui](https://boards.straightdope.com/u/El_Gui)\ **Post date:** [February 15, 2003, 2:31am UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/33 "2003-02-15T02:31:18Z")
> [@](#): > > \*Originally posted by Jonathan Woodall \* > \*\*In the US your student loans are irrevocable. You either pay them, or they follow you for the rest of your life. \*\* Actually, no. Student loans in the US _can_ be discharged during Bankruptcy proceedings if there is a finding that paying the loan will impose an “Undue Hardship” on the debtor and the debtor’s dependents. [(Bottom of page)](http://www.ed.gov/offices/OSFAP/DCS/loan.cancellation.discharge.html) Now, as far as a debtor meeting the “Undue Hardship” test, that is _extremely_ difficult to do, to say the least. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [February 15, 2003, 4:24pm UTC](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121/34 "2003-02-15T16:24:29Z")
> [@](#): > > \*Originally posted by Magayuk \* > \*\*I went to school with an older woman who had declared bankruptcy many years before so she didn’t have to pay back her OSAP (Ontario student loans) from her previous attempt at college. And there she was, with a fresh Ontario loan, which not only covered her tuition, but her rent, and food for her and her kid. > > While I couldn’t get OSAP because my parents (who didn’t financially support me) made too much money. What a system.\*\* Parliament closed this loophole in the new [Bankruptcy and Insolvency Act](http://laws.justice.gc.ca/en/b-3/6088.html): > [@](#): > > **178.** (1) An order of discharge does not release the bankrupt from > … > (g) any debt or obligation in respect of a loan made under the _Canada Student Loans Act,_ the _Canada Student Financial Assistance Act_ or any enactment of a province that provides for loans or guarantees of loans to students where the date of bankruptcy of the bankrupt occurred > > (i) before the date on which the bankrupt ceased to be a full- or part-time student, as the case may be, under the applicable Act or enactment, or > > (ii) within ten years after the date on which the bankrupt ceased to be a full- or part-time student. [Previous page](https://boards.straightdope.com/t/will-declaring-myself-bankrupt-cancel-my-student-debt/154121.md?page=1)