The Department of Education has proposed expanding debt forgiveness in a very expansive way. the rule, called "borrower defense to repayment", allows Federal student loans to be discharged if "that school committed fraud by doing something or failing to do something, misrepresented its services, or otherwise violated applicable state law related to your loans or the educational services you paid for." If someone can prove that their law school did in fact defraud them, the Federal loans may be forgiven. I am not certain if this forgiven debt is treated as taxable income like with IBR, but it is unlikely. There are also the public policy considerations of allowing the taxpayers to get saddled with this toxic debt; I personally would like to see the Department of Education work with the Department of Justice to recover the forgiven money from the law schools. Shams like TJSL and Cooley will probably close soon if the aforementioned scenario ever occurs. In addition, it may be possible to recover monies from formerly respectable schools that have drastically lowered their standards and trade on their name recognition to peddle worthless degrees to grads (e.g. George Washington) Only time will tell.
This rule is not a slam dunk for law school graduates. It has been well documented how resistant the judiciary is to ruling against law schools in suits brought by aggrieved graduates. In the same vein, I doubt that the Department of Education will be eager to forgive law school debts on a grand scale. However, as this Buzzfeed News article states, "lawsuits could provide significant fodder for law school students in their defense to repayment claims."
Friends, I would like to think that the tide is finally turning against law schools. We need to keep the pressure on until only the truly reputable institutions remain and the supply of law grads is decreased to an acceptable level.