This heartbreaking tale of a 56-year-old woman’s struggles shows just how difficult it is to get your student loans discharged

This image was removed due to legal reasons.

Rita Gail Edwards, 56, resides in the town of Cornville, Arizona. She lives with her youngest child Asia, a 32-year-old trans woman who has been diagnosed with bipolar disorder, post-traumatic stress, and a host of other maladies. She earns an average annual income of $14,157.80 from consulting work; a few years ago, she earned less than $700.

Last month, a judge ordered all $244,000 of Edwards' student debt discharged. It was a rare event, because as it currently stands, the legal standard of "hardship" that must be met to have this occur in the U.S. is almost impossibly high to reach.

But in detailing Edwards' life situation, Arizona bankruptcy judge Daniel Collins lays out a situation in which, while the specifics are unique, the shape is all too common for many Americans.


Asia has spent most of the past 15 years in correctional institutions, and has a felony charge for an undisclosed offense. She relies on food stamps, and has so far been denied disability benefits. "However, [Edwards] is hopeful that Asia’s disability appeal will reverse this denial," Collins writes:

According to Debtor, Asia is intelligent but is so debilitated by her numerous psychological challenges that, for the foreseeable future, she is not likely to produce any meaningful support for herself or her mother’s household," the judge writes.

Edwards’ eldest child Regina is a 34-year-old single woman who suffers from type 1 diabetes, a disease which has caused blindness, failing kidneys, and a failing pancreas. She lives on her own and receives $844 per month in public assistance, which is insufficient to cover her living expenses and medical needs.

Their father died in 1990.

Edwards earned three degrees from Ottawa University, a private, non-profit, faith-based liberal arts college located in Ottawa, Kansas. The debt Edwards now owes was racked up through pursuing the three degrees.


Edwards and her then-husband both lost their jobs during the recession in 2009. She now earns money from unspecified "jobs in education and various forms of counseling," for wages ranging from $16 to $28 per hour. She also established a sole proprietorship named SET Counseling which provides a host of counseling services in Northern Arizona.

Edwards pays $494 a month towards the mortgage on a tiny mobile home. Prior to acquiring the mobile home, she lived for two years in a 20-year-old fifth wheel trailer with her then husband. At her current residence she sometimes turns off the water heater for several months at a time in order to trim expenses. She has  no health insurance and is being assessed for health insurance under the Affordable Health Care Act.


Collins writes Edwards has applied "for numerous jobs in the past four years, to no avail," and relies almost exclusively on her counseling work—she receives no governmental aid nor does she receive income from any source beyond her work with SET.

The question before Collins was whether all of this means that the amount of debt Rita owes amounts to an "undue hardship," a term for which a New York Court set up a three-pronged test, called the Brunner test, in the mid '80s.


The prongs are:

  • The Debtor is not presently capable of maintaining a “‘minimal’ standard of living for herself and her dependents if forced to repay the [student] loans.”
  • “That additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans.”
  • “That the debtor has made good faith efforts to repay the [student] loans."

Collins states unequivocally that Edwards passes all three tests:

At present, Debtor is not just living hand to mouth, she is barely eeking (sic) out an existence," he writes. "She lives in a tiny mobile home in a small but affordable Northern Arizona town. Her vehicle, while apparently serviceable, is an old high mileage compact car. Debtor does not live an extravagant life. She periodically shuts off her water heater in an effort to reduce expenses.


But there are many reasons why, even though they face hardships on the level of Edwards', most Americans are unlikely to see their student debts discharged.

For one, student debt is not supposed to be discharged in bankruptcy unless under extreme circumstances—the one established by the Brunner test. Congress basically carved student loans out of bankruptcy protection in the mid-'70s, and it's been that way since.


For another, Edwards represented herself in court, at least for the initial part of her case; she somehow figured out how to put her case together on her own without, at first, any outside legal counsel, according to her attorney Michael Zimmerman. (Edwards declined to go on the record for this story because her debt holder could still appeal Judge Collins' ruling.)

"She’s an incredible person, she’s very driven, very determined, very smart," Zimmerman told me. "She actually filed the case on her own, filed the complaint, wrote it, and managed to get it served."


A pro-bono counsel allowed Zimmerman to step in to finish up Edwards' case. He doubts that even with all of the moxie Edwards demonstrated she would have been able to finish the case, because the legal resources required to fight her debtholder would have been enormous.

Indeed, Edwards' creditor, Educational Credit Management Corporation (ECMC), challenged minute details of her daily expenses, including $50 a month spent on "recreation." The company did not immediately respond to a request for comment.


"It’s tough for someone who can’t afford to pay their attorney to do that on their own," he said.

In his order, Collins suggested it was time for courts to start reconsidering the Brunner test, given the staggering amounts of student debt outstanding in America, especially among older Americans. He cited Loyola Law School Professor Anne Wells, who has pointed out that the end of 2012, Americans in their 50s owed $112 billion and those in their 60s owed $43 billion. "In short, student loan debt is a gigantic issue in the United States, and not just for students in their 20s," Collins wrote."


But Wells said there is in fact no sign that courts have begun changing their mind on the issue.

"Brunner is binding precedent, it’s the test courts have to follow," she said.

Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.

Share This Story

Get our `newsletter`