Should we allow student debt to be discharged in bankruptcy?
Bill Summary
This bill amends the federal bankruptcy code to permit a borrower to discharge in bankruptcy a nonprofit, government, or private student loan. Sponsor: Rep. Delaney, John K. [D-MD-6]
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Opponents say
• Opening this door will facilitate abuses of the system, with many opting for bankruptcy when they could repay the loans with effort and time.
• The government is often the backer of student loans. Therefore discharging educational loans in a bankruptcy robs the government -- and by extension the taxpayers who buttress it -- of money.
• The student debt crisis in America is a pressing problem, but this solution is palliative.
• The government is often the backer of student loans. Therefore discharging educational loans in a bankruptcy robs the government -- and by extension the taxpayers who buttress it -- of money.
• The student debt crisis in America is a pressing problem, but this solution is palliative.
Proponents say
• Reforming bankruptcy law will only help those with the “absolute” greatest need as bankruptcy is a lengthy legal process with anti-abuse protections in place.
• Student loan debt should be no different than any other type of debt, particularly when we should be increasing accessibility to higher education for students from all backgrounds.
• This is one component of a more complex solution needed to solve the student debt crisis in America.
• Student loan debt should be no different than any other type of debt, particularly when we should be increasing accessibility to higher education for students from all backgrounds.
• This is one component of a more complex solution needed to solve the student debt crisis in America.
