[anoncoward111]

In theory, the Mercedes can be reposessed if she starts missing payments, and she can file bankruptcy to protect herself from spiraling debts.

In this situation, "a degree can't be repossessed", so the IRS and banking system will squeeze every penny they can out of her since she can't declare bankruptcy to get rid of these loans (that she's paying!)

What she really should do is negotiate a refinance, put the loans on a credit card, and then go bankrupt. She won't have good credit for 7 years, but she will also lose the $65,000 worth of debt hanging around her neck too.