Sens. Dick Durbin (D-Ill.) and John Cornyn (R-Texas) recently introduced a bipartisan bill aimed at restoring the way that student loans are handled in bankruptcy. In contrast to other recent proposals, such as free college and a student loan jubilee, this legislation isn’t a flashy proposition — it’s a great idea, one that enjoys support from both sides of the aisle among policymakers and some experts, according to a commentary in The Hill. Over the past 30 years, a series of policy changes have made it more difficult for borrowers to have their student loans discharged in bankruptcy. These policy changes were driven by the idea that investments in education could not be transferred, because the borrower would always retain the benefits acquired from their education. This would make sense if degrees paid off uniformly with large dividends, but the reality is that some investments in education fall short of that mark — unpredictably offering little or no value to the borrower. Read more.
*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.
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.
