Congress May Allow Private Student Loans to Be Shed in Bankruptcy
Two bills recently introduced in Congress aim to change that. Senators Dick Durbin (D-IL), Sheldon Whitehouse (D-RI) and Al Franken (D-MN) introduced a bill in the Senate that would rework the bankruptcy code, while Representatives Steve Cohen (D-TN) and Danny Davis (D-IL) introduced a similar bill in the House. While there are some differences between the measures, each aims to have the courts treat private student loans like most other types of debt. However, both bills would continue to except private student loans offered by state agencies from bankruptcy proceedings, according to Mark Kantrowitz, who tracks the student loan industry for FinAid.com.
A hearing on the bill is scheduled for this morning in the House.