Many people considering bankruptcy relief are aware or soon learn that student loan debt is non-dischargeable in bankruptcy. This is true for both federally guaranteed student loan and student loans issued by private lenders and has been true for many years. Student loan debt has exceeded credit card debt in this country for several years now. Currently it sits at approximately 1.5 TRILLION dollars, with a trillion dollars added in just the last eight years. On the campaign trail, President Trump stated it was “terrible that one of the only profit centers [the U.S. Government] ha[s] is student loans.” So far in his 100+ days in office, the crushing legacy of student loan debt has not been revisited by the President. However, there may be hope on the horizon.
In a bipartisan effort to redress the fact that student loan debt is treated differently than all other type of debt in bankruptcy, Congressman John Delaney (D-MD) has introduced a bill that would amend the current Bankruptcy Code to allow student loan debt to be treated the same as all other unsecured debt. He has been joined by Congressman John Katko, a republican representative from New York. The bill, entitled The Discharge Student Loans in Bankruptcy Act, will need significant support if it is to have a chance to become law and provide untold relief to millions of people in this country. The Department of Education will not easily give up this fight and will work behind the scenes to squelch any attempt to change the current law. If the swamp is to be drained, this is a humdinger of an issue to begin with. It will provide untold relief to the middle class in this country and stop our children from being afraid to improve their education and employment prospects. That is why it is critical that we speak out to our Congressmen and women and to our Senators and demand support for this common sense legislation. If we ourselves are not drowning in student loan debt, we likely all know someone that is struggling terribly with this issue. Call your Congressman/woman and Senators today or make your support for the bill known online.
The National Association of Consumer Bankruptcy Attorneys (NACBA) has set up a page on its website which will allow you to email your representative directly. Simply click here to go to the page and then follow the instructions provided. Please note that there are separate links for “borrowers” and “attorneys”. Make sure you use the correct form.
If you are having difficulty repaying your loans, our offices offer a free, face to face and confidential consultation with an attorney during which we will help you to explore your options.
Carla M. Handy is the Managing Partner of the Bond & Botes Law Offices in Gadsden and Anniston, Alabama. She holds a Bachelor of Arts from Auburn University, and a Juris Doctorate from the University of Alabama School of Law. She has been helping families navigate consumer bankruptcy cases since 1994.Read her full bio here.