Congress: Support Fair Protections for Student Loan Borrowers
Legislation was has been introduced in both the House and the Senate to end discrimination against student loan borrowers in bankruptcy.
For borrowers who get into trouble and cannot find a way to deal with their debts, bankruptcy is a basic protection that allows them to have some of their debts forgiven ("discharged"). In the 2005 bankruptcy bill, however, loans used to pay for college were stripped of this protection in virtually all cases.
Private student loans have high and variable interest rates and few borrower protections, and have often been marketed to students in aggressive and misleading ways. Unlike federal student loans, private loan borrowers do not have important programs available to lighten the load of student debt like the Income Based Repayment program. Instead, they are at the mercy of their lender.