Congressman Cohen Introduces the Private Student Loan Bankruptcy Fairness Act
Would treat private student loans like other unsecured debt in bankruptcy
WASHINGTON – Congressman Steve Cohen (TN-09), a senior member of the Judiciary Committee which has jurisdiction over bankruptcy law, today reintroduced the Private Student Loan Bankruptcy Fairness Act (H.R. 138). The legislation would restore the treatment of private student debt to its pre-2005 status and make it dischargeable in bankruptcy.
The bill is cosponsored by Representatives Danny K. Davis of Illinois and Julia Brownley, Eric Swalwell and Ro Khanna of California.
Congressman Cohen made the following statement:
“The 2005 bankruptcy ‘reform’ bill contained a provision to prevent private student debt from being discharged in bankruptcy, a gift to for-profit lenders not subject to the oversight dedicated to federal student aid debt. Before 2005, private student loans were treated in bankruptcy like most other unsecured consumer debt, such as credit card debt. But now borrowers with mountains of student loans can no longer restart their lives if they fall on hard times.
“No one wants to declare bankruptcy but being unable to discharge substantial student loan debt makes the process even more onerous and disproportionately harms students of color. Our bill ensures that privately issued student loans will once again be treated like other consumer debt and be dischargeable in bankruptcy.”
# # #