Retired Bankruptcy Judge Warns Student Loan Changes Could Push More Borrowers Into Court
A retired federal bankruptcy judge says Donald Trump's student loan overhaul could lead to more bankruptcy filings, CNBC reported on Oct. 17, 2026.
Sarah Sharer Curley presided over bankruptcy cases for nearly three decades and discussed the issue in an interview about her new book.
Curley was the first woman appointed to the U.S. Bankruptcy Court for the District of Arizona. She retired in 2014.
Her book is titled The Price of Forgiveness: Debt, Bankruptcy, and the Future of Fairness in America, and CNBC's Annie Nova interviewed her about it this month.
A $584,000 Balance at Age 73
Curley describes one case from 2012 that stayed with her. A 73-year-old woman came before her owing more than $584,000 in student loans.
The debt dated to the 1970s and kept growing through the woman's public sector career, Curley writes. The woman had never earned much, Curley said, and by the time she sought relief she was living in poverty on Social Security alone.
Bankruptcy law is strict about student loans. CNBC noted that those rules can make it nearly impossible to discharge the debt, meaning to have it legally erased. Curley called the woman's situation a familiar one.
Curley's Case Against the System
Curley argues the legal system treats borrowers and financial institutions differently. In her words, the financial markets are allowed to take countless risks, yet an individual is refused forgiveness for choosing to pursue an advanced degree.
She describes a legal system that often fails to deliver the second chance it promises to indebted Americans, according to CNBC. The outlet also reported that Curley sees unfairness in the process itself.
Filings Have Climbed Since 2022
More than half a million personal cases were filed in 2025, an increase of almost 50% from three years earlier, according to the Administrative Office of the U.S. Courts, the administrative arm of the federal judiciary.
Curley said people filing for bankruptcy are subject to many unexpected events. She also said the public often assumes filers are committing fraud, a view she disputes in the interview.
In Curley's account, student loans sit in a separate and harder category in bankruptcy court than most other debts.