Bankruptcy gives millions of Americans a fresh financial start every year. But if the reason you are struggling to make ends meet is because of the student loans you took out to get an education, you’re out of luck.
Senator Dick Durbin of Illinois would like to change that. Student loan debt currently comprises $1.5 trillion. That’s $1.5 trillion that educated Americans are not putting into the economy, despite their advanced degrees. They are not getting married, they are not buying houses, and they are not having babies, in large part because they owe too much money.
Senator Durbin has proposed the Student Borrower Bankruptcy Relief Act of 2019. The legislation seeks to eliminate the section of the bankruptcy code that makes student loan debt non-dischargeable. He explains: “Filing for bankruptcy should be a last resort, but for those student borrowers who have no realistic path to pay back their crushing student loan debt, it should be available as an option to help them get back on their feet.”
Before 1976, student loans were fully dischargeable in bankruptcy.