U.S. Supreme Court passes on student loan bankruptcy case

WASHINGTON, Jan. 14 (UPI) -- The U.S. Supreme Court turned away an appeal that might have overturned the way student loans are handled in bankruptcy court, bypassing an issue that has taken center stage in national politics.

The court said it would not consider an appeal from Mark Tetzlaff, 57, an unemployed former law and business school student with some $260,000 in outstanding education loan debt. Tetzlaff filed Chapter 7 bankruptcy in 2012 and sought to have his student loans discharged. He said his long history of alcoholism, depression and run-ins with the law have prevented him from finding employment to repay his debt.

Tetzlaff's attorneys argued the Wisconsin man was subject to a strict standard, called the Brunner test, adopted by the Seventh Circuit, which requires proof of "undue hardship," for dismissal of federally backed student loans, a vague standard that has been unevenly interpreted by courts nationwide.

Local and appeals courts said Tetzlaff has the ability to get a job and repay the loans.

With about $1.2 trillion in outstanding student loan debt nationwide, and a growing number of borrowers defaulting on loans, lawmakers are looking for ways to address the problem. Tuesday, Wisconsin Gov. Scott Walker announced a series of legislative proposals to make college more affordable and increase access to grants. At the same time, some presidential candidates have called for tuition-free and debt-free college.