TIME TO BREAK THE CHAINS!
ALL STUDENT DEBTORS MUST GET
THE RIGHT TO BANKRUPTCY PROTECTION!
UPDATED FOR 2019!
Student debt is now emerging a major financial crisis in America.
Consumers now owe more on their student loans than their credit cards.
Student loans outstanding today — both federal and private — total some
$1.4 trillion
Unfortunately, student debt is the only form of US debt that cannot be
relieved by bankruptcy
While student loan debt was dischargeable in bankruptcy prior to 1978, the US Bankruptcy Code of 1978 made an exception for bankruptcy discharge of education loans This law which was strengthened as recently as 2005 with the Bankruptcy Abuse Protection Act. (Finaid) The fact that these loans are not dischargeable through bankruptcy is a uniquely harsh measure that even gambling and credit card debt is not subject to.
It is time to change the law so that students can declare bankruptcy on their debt.
Want to Help Struggling Student Loan Borrowers? Start with Bankruptcy Reform (Demos, 5-31-17)
Bankruptcy Reform Bills in Current Congress:
Press Release (Dick Durbin Official Website, 5-9-19)
On May 9th, 2019, U.S. Senators Dick Durbin (D-IL) and Elizabeth Warren (D-MA), along with U.S. Representatives Jerrold Nadler (D-NY-01) and John Katko (R-NY-24) introduced a bicameral bill that would give Americans overwhelmed by student loan debt the option of obtaining meaningful bankruptcy relief. The "Student Borrower Bankruptcy Relief Act of 2019" would eliminate the section of the bankruptcy code that makes private and federal student loans nondischargeable, allowing these loans to be treated like nearly all other forms of consumer debt.
Dick Durbin said the following about the bill: “Filing for bankruptcy should be a last resort, but for those student borrowers who have no realistic path to pay back their crushing student loan debt, it should be available as an option to help them get back on their feet. Our nation faces a student debt crisis, and it’s time to restore the meaningful availability of bankruptcy relief to student loan borrowers.” (Dick Durbin)
Elizabeth Warren said the following about the bill: “Long before I came to the Senate, I fought my heart out to keep student loans dischargeable in bankruptcy. But over and over again, Congress chipped away at this critical protection for student loan borrowers. The Student Borrower Bankruptcy Relief Act fully restores this protection, and I’m thrilled to work with Senator Durbin to fight for this legislation.” (Dick Durbin)
H.R. 770 Discharge Student Loans in Bankruptcy Act of 2019 (Read Bill Here)
Bankruptcy Reform Bills in Last Congress:
H.R.2366 - Discharge Student Loans in Bankruptcy Act of 2017 Sponsor: John K. Delaney (D) NACBA Response Credit Union Times Review of Bill
This bill amends the federal bankruptcy code to permit a borrower to discharge in bankruptcy a nonprofit, government, or private student loan, or an obligation to repay an educational benefit, scholarship, or stipend.
This is the only bill that gets the job done, covering government and private loans.
S. 1262 - The Fairness for Struggling Students Act of 2017 Sponsor: Richard Durbin (D) NACBA Response
An act to give private student loans the same treatment as nearly all other forms of private unsecured debt.
H.R.137 - Stopping Abusive Student Loan Collection Practices in Bankruptcy Act of 2017 Sponsor:John Conyers, Jr. (D)
This bill amends the federal bankruptcy code to allow an individual whose student loan debt is discharged due to undue hardship to recover court costs and attorney's fees for the discharge proceeding if the court finds that the position of the creditor opposing the discharge was not substantially justified.
Sen. Kamala Harris (D) supports bankruptcy reform for some debts, free community college, and undocumented students' access to higher learning. Freedom to Learn aims at the abusive debt system.
New questions about potential illegality by Navient, the main servicer of student loans. See the CNBC article here.
SEE OUR MAIN PAGE ON STUDENT LOANS
THE HUMAN SIDE OF THE CRISIS
Default: the Student Loan Documentary (Broadcast Version)
Bankruptcy Questions:
FinAid.org - Bankruptcy Questions
Student Loan Finance Reform:
S.1162 - Bank on Students Emergency Loan Refinancing Act Sponsor: Elizabeth Warren (D) Cosponsor: Richard Durbin (D) and 36 others
This legislation would allow those with outstanding student loan debt to refinance at the interest rates offered to new federal borrowers in the 2016-2017 school year.
Related World Future Fund Reports:
Education Spending: An Area Where America Spends More and Gets Less
Broadband for All (How the internet can help replace some of the need for college education.)
Resources for Student Loan
Borrowers
You are not alone. The following links can help you better understand
your rights, find peers in the same situation as yourself, and help make
your voice heard.
Government Regulators and Law
Concerning Student Loans
Consumer
Financial Protection Bureau
Federal
Deposit Insurance Corporation
Federal Trade Commission
Dodd-Frank Wall Street Reform and Consumer Protection Act
Consumer Action - Financial Reform Quick Fact Sheet (pdf file)
Advocacy Groups
Student Loan
Borrower Assistance
Student Loan
Justice Facebook Alan
Collinge Facebook
Consumer Affairs - Student Loan Section
Legal Assistance
Find Law