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Student Loan Debt – Hopes for Discharge in Bankruptcy

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Background:  

  • Prior to 1976, federal and private student loan debt were both dischargeable when individuals filed for bankruptcy.
  • In 1998, federal student loans were made nondischargeable without a very restrictive “hardship”.   We all know that this is not the case since then with the new restrictions that were put in place. 
  • In 2005, Congress made private student loans nondischargeable. 

Current Update:

May 9, 2019 a new bill was introduced “The Student Borrower Relief Action of 2019” which would eliminate the bankruptcy code which makes private and federal student loans nondischargeable and treated as any other consumer debt in bankruptcy.

Let’s follow this bill and hope there will be relief for the 44 million Americans who owe $1.5 trillion in student debt.

This bill was introduced by U.S. Senators Dick Durbin (D-IL) and Elizabeth Warren (D-MA), and U.S. Representatives Jerrold Nadler (D-NY-01), and John Katko (R-NY-24) and co-sponsored by Senators Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Sherrod Brown (D-OH), Kamala Harris (D-CA), Maggie Hassan (D-NH), Mazie Hirono (D-HI), Amy Klobuchar (D-MN), Patrick Leahy (D-VT), Ed Markey (D-MA), Jeff Merkley (D-OR), Jack Reed (D-RI), Bernie Sanders (I-VT), Jeanne Shaheen (D-NH), Chris Van Hollen (D-MD), and Sheldon Whitehouse (D-RI).