Chapter 7 Bankruptcy and Student Loans

The Law Office of Jeffrey L. Weinstein

Congress plan to make private student loans dischargeable in bankruptcy

In 2015, 13 senators of the 144th Congress (2015-17) co-sponsored the “Fairness for Struggling Students Act of 2015.”, which was the latest in a series of legislative attempts to get the Bill passed. Unfortunately, the Bill died in the previous Congress, which concluded on 3-January 2017.

Similar Bills were previously introduced, under the same title, in 2010, 2011 and 2013. To become law, a bill must be passed by both the House and Senate, and then be signed by the President.

The main purpose of this piece of legislation was to restore the ability for debtors filing for Chapter 7 bankruptcy to discharge private student loans.

This Bill tried to reverse a 2005 Law that made all students loans non-dischargeable in Chapter 7 bankruptcy except in cases of extreme hardship. The 2005 law was intended to safe guard federal investments in higher education, but that bill included private bank loans as well as federally insured loans.

In 2010, Student loan debt was over $1 trillion, more than the credit card debt. Even the 56% of graduates who found jobs, cannot handle the heavy burden of repayment of the average debt of $24,000.00 per graduate.

These student loan Bills have always been stalled in committee, and without strong encouragement from constituents, Republicans and Democrats, even future Bills will not pass. E-mail or call your congressperson today.

For more information email me at or call me at 212-693-3737 for Free Consultation

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