Three U.S. Senators unveiled legislation on Jan. 23 to reverse a 2005 change in bankruptcy laws that makes it difficult to have private student loan debt discharged, the Huffington Post reported on Friday. The Fairness for Struggling Students Act of 2013 is cosponsored by Sens. Dick Durbin (D-Ill.), Sheldon Whitehouse (D-R.I.) and Jack Reed (D-R.I.), and is a similar piece of legislation authored by Durbin in the previous session of Congress. Student loans are the largest form of consumer debt, topping $1 trillion nationally, but they are the only type not eligible for bankruptcy. Federal loans have not been eligible for discharge in bankruptcy since 1978, to safeguard taxpayer money, but it was not until the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 that this was extended to private student loans. "In 2005, the law was unjustifiably changed to give private student loans the same privileged bankruptcy treatment as government loans, even though private student loans have vastly different terms and fewer consumer protections," according to Durbin's office.
