Yesterday Senator Richard Durbin (D-IL) and Senator John Cornyn (R-IL) introduced “Fresh Start Through Bankruptcy Act”, bipartisan legislation, that will restore the ability to discharge student loans in bankruptcy.
This is the first bipartisan effort in the U.S. Senate since 1998, when this discharge right was eliminated, that will provide bankruptcy relief for struggling borrowers across the country. The bipartisan bill contains a 10 year waiting period and clawback provisions to permit the Department of Education to recover funds from institutions with higher repayment default rates.
Additionally yesterday, the Senate Committee on the Judiciary held a hearing entitled “Student Loan Bankruptcy Reform”. During the hearing Senator Durbin shared stories in his opening statement from struggling student borrowers and argued for the need to allow them the ability to discharge their loans in bankruptcy as a last resort.
The text of the bill has not yet been made publicly available.