Senators introduced a bipartisan bill to allow student loan discharge in bankruptcy Via ForbesAdvisor
Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations.The debate over student loan reform continues as lawmakers reconsider whether they can be discharged in bankruptcy.
Durbin, who has introduced and co-sponsored student loan reform bills in the past, noted that this would be the first bipartisan effort to reform the bankruptcy rules. The 10-year waiting period, according to the lawmakers and hearing witnesses, would reduce the “moral hazard” of borrowers taking on exorbitant amounts of student loan debt under the assumption that they’d never have to be repaid in full.
“We must look at the entire higher education ecosystem to solve these challenges— recommendations to modify the bankruptcy code would address only symptoms of the larger problem,” said Senator Chuck Grassley . “If we don’t correct the underlying causes, then we’re closing the barn door after the horse has gotten out.”
“If I could have discharged my loans in bankruptcy—as painful as filing was—it would ultimately have been a great relief,” Barta said. “I wouldn’t still be having sleepless nights worrying about how I am going to pay and what happens to my children, my husband and me if I cannot.”
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