Nonprofit company Upsolve, known for offering tech solutions to low-income individuals filing for bankruptcy, recently launched a new tool aimed at offering relief from student loan debt.
Despite Upsolve’s tools helping over 13,000 individuals eliminate more than $750 million in debt since 2017, student loan debt has proven more challenging. 32% of Upsolve users had considerable student loan debt that persisted even after filing for Chapter 7 bankruptcy, according to Jonathan Petts, cofounder and CEO of Upsolve.
The partners in the development of this new tool include Philadelphia Legal Assistance and it has been funded by a 2023 Legal Services Corporation Technology Initiative Grant. The tool has already been utilized in 102 cases seeking relief from student loan debt, with nine approved and 93 more in progress.
The addition of the new tool in Upsolve’s arsenal has been facilitated by the November 2022 guidance issued by the U.S. Department of Justice concerning the discharge of student loans in bankruptcy cases. Upsolve’s Chief Product Officer, Ben Jackson, shared that lack of clear standards and inconsistent interpretations of the law previously made it challenging to receive relief from student loan debt in bankruptcy cases. The guidance provided clear standards for achieving a ‘hardship exemption’, enabling Upsolve to build a tool centred on these standards.
The student loan relief tool functions as an add-on to Upsolve’s core Chapter 7 relief tool. It assists debtors in the additional steps necessary for the discharge of student loans whilst filing for bankruptcy. The process begins with some basic questions to determine if the debtor is eligible for the hardship exemption. If they qualify, the tool guides them through collecting the necessary information, while also educating users about the process and its requirements.
The tool helps users procure and consolidate all the necessary information about their debts, including their report from the National Student Loan Data System. Subsequently, the tool compiles this information into the forms required to file for the hardship exemption.
Testimonials from relieved users highlighted the tool’s transformative impact. Sharing her experience, one single mother shared that the relief she gained from her student loan debt bestowed a liberating sense of preparedness for the next chapter of her life.
To learn more about the development of this tool, consider tuning into the recent episode of the Talk Justice podcast, Upsolve’s New Student Debt Relief Tools. It features interviews with Upsolve’s Chief Product Officer, Ben Jackson, and Jonathan Pyle of Philadelphia Legal Assistance, a key player in creating the tool and securing the necessary LSC grant.