Sarah Sharer Curley, a former U.S. Bankruptcy Court judge for the District of Arizona who retired in 2014, has published a book examining the intersection of debt, bankruptcy, and fairness in the American financial system. In recent commentary, she has expressed concern about the trajectory of student loan policy and its potential impact on personal bankruptcy rates.
Curley pointed to a notable case from her judicial tenure involving a 73-year-old woman with more than $584,000 in student loan debt accumulated since the 1970s. Despite living in poverty and relying solely on Social Security income from her decades of public sector work, strict bankruptcy laws prevented discharge of the debt. The judge ultimately granted relief based on the woman’s qualifying public service years, reducing her repayment obligation to three additional years rather than the full balance.
According to data from the Administrative Office of the U.S. Courts, personal bankruptcy filings exceeded half a million in 2025, representing a roughly 50% increase compared to three years earlier. Curley attributes this trend partly to structural changes in the labor market, noting that despite low unemployment figures, many workers are employed as independent contractors with limited benefits or work multiple part-time positions for insufficient compensation. She emphasized that bankruptcy filers are typically not attempting fraud but rather confronting unexpected life events such as job loss, chronic illness with mounting medical expenses, or the burden of substantial educational debt.
Regarding recent policy developments, Curley characterized a bill passed in July 2025 as harmful to student borrowers. She warned that the legislation’s unrealistic federal loan caps would force students to seek private financing at significantly higher interest rates. Under such conditions, a medical student requiring a $300,000 loan with a lower credit score could face monthly payments exceeding $5,000 at a 16% interest rate, resulting in substantial unsustainability. Curley predicted that bankruptcy filings would likely increase as a consequence of these policy changes and the reduction in the Department of Education’s capacity to negotiate debt modifications following 2025 staffing reductions.
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