Rethinking Bankruptcy and Student Loans

Posted on September 25, 2009. Filed under: Uncategorized |

“WASHINGTON — As Congress and the White House move to alter bankruptcy code to make it more equitable to consumers, a House subcommittee began a reconsideration Wednesday of how bankruptcy law treats private student loan debt.

Rep. Steve Cohen (D-Tenn.), chair of the House Judiciary Subcommittee on Commercial and Administrative Law, held a hearing to initiate legislation reversing a 2005 change in federal bankruptcy law that, he said, gave private student loan lenders a “favorable, unusual” advantage over borrowers, as well as in comparison to the issuers of most other kinds of consumer loans. “Hopefully it’ll be bipartisan and if not, you know, we’ll just have to forge ahead and do what’s right.”…..”

I watched the hearing, and can tell you that the empirical evidence was presented that warranted the case for making private student loans that are over 5 to 7 years old, at least, dischargeable without an undue hardship lawsuit.

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