July 23, 2020

Democrats Push Bill Allowing Student Loans to Be Absolved in Bankruptcy

The bill is aimed at people suffering from medical debt or loss of income, and those struggling to pay off student loans

Democratic Senators introduced a bill Thursday that would allow people to cancel student-loan debt in bankruptcy if they can show income loss tied to economic fallout from the coronavirus pandemic.

Federal law makes it extremely difficult for people to cancel student loans using bankruptcy. The measure from Sens. Sheldon Whitehouse (D., R.I.) and Sherrod Brown (D., Ohio) would allow student-loan cancellations for people who either racked up large medical bills in the past three years or lost wages because of the coronavirus fallout.

Republicans have expressed concerns that widespread student-loan cancellations will cause the cost of higher education to rise, and earlier attempts to ease student loan restrictions for bankrupt borrowers have failed. Rising costs could make that education less accessible, according to those who oppose easing standards for forgiving student-loan debt.

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Read the full article on the Wall Street Journal website here. 


By:  Katy Stech Ferek
Source: Wall Street Journal