# What the Student Borrower Bankruptcy Relief Act Does

Right now, student loans are treated differently from almost every other type of debt when someone files for bankruptcy. If you declare bankruptcy to get relief from credit card debt, medical bills, or other obligations, your student loans typically stick around—you still have to pay them back even after the bankruptcy is discharged. This bill would change that by removing the special protection that keeps student loans off the table in bankruptcy cases.

Currently, federal law says student loans cannot be discharged (erased) in bankruptcy unless the borrower can prove they face "undue hardship"—a very high legal bar that's difficult and expensive to meet. This bill would eliminate that exception entirely, meaning student loans would be treated like any other debt. If someone files for bankruptcy and their debts are discharged, their student loans would go away along with everything else. This would apply to both federal student loans and private student loans.

The practical effect is that people drowning in student debt would have a real escape route through bankruptcy, just like someone with overwhelming credit card or medical debt. Someone who has exhausted other options and genuinely cannot afford to repay could potentially get a fresh financial start. However, this could also concern lenders and potentially affect future borrowing costs or availability of student loans if lenders worry they won't be repaid. The bill would take effect immediately upon passage and would apply to any bankruptcy cases filed after that date.

Student Borrower Bankruptcy Relief Act of 2022

Nadler, Jerrold

Student Borrower Bankruptcy Relief Act of 2022 This bill allows student loans to be discharged in bankruptcy. Under current law, these loans are only dischargeable if such debt imposes an undue hardship on the debtor.