How the Government Polices What Student Debtors Spend

For borrowers seeking relief on their student loans in bankruptcy, there’s no room for any spending seen as excessive.

Tangerie Shells lost her only shot at life without debt when she decided to spend $175 per month on meals outside her home.

Shells, a social worker at Sacramento County’s department of children’s protective services, supports her elderly mother, disabled husband, and three children. After she declared bankruptcy, she asked the court to forgive the $137,000 she owed in student loans because paying them, she said, would make it impossible to provide for five family members.

“Shells cannot purposely choose to live a lifestyle that prevents her from repaying her student loans,” lawyers for the Department of Education wrote in court documents. The department attorneys suggested her $700-per-month food budget was too high. In all but the rarest circumstances, people who declare bankruptcy still have to repay their student debt. Shells was aiming to be one of those unique cases. The judge agreed that Shells spent too much on “nonessential items,” including the meals she didn’t cook at home, and denied her relief in May.