Federal lawmakers yesterday introduced a bill that would give student loan borrowers the power to leave that debt behind when they file for bankruptcy protection, the Wall Street Journal reported. The proposal would enable bankrupt student loan borrowers to cancel that debt along with medical bills, credit card debt and other payment obligations. Erasing student loans while in bankruptcy is very difficult, even for borrowers who face extreme financial difficulties. The bill, Student Borrower Bankruptcy Relief Act of 2019, marks the first time Senate lawmakers have proposed giving student loan borrowers the power to cancel their federal student loans. Nationwide, there is roughly $1.5 trillion in federal student loans outstanding, according to the Federal Reserve Bank of New York. House lawmakers introduced a similar bill in 2017. Reps. Jerrold Nadler (D-N.Y.) and John Katko (R-N.Y.) introduced the bill in the U.S. House of Representatives. Read more. (Subscription required.)
Read Durbin's press release on the legislation.
The issue of student loan debt and bankruptcy is the first problem addressed in the Final Report of the ABI Commission on Consumer Bankruptcy. Click here to download your copy.
