Sign the petition to Congress: Allow student loan debt to be discharged through bankruptcy.

In 1998, Congress reauthorized the Higher Education Act. Unbeknownst to many, a provision was slipped into the bill that made it virtually impossible for student loan borrowers to discharge student loan debt through bankruptcy.

The clause forced borrowers who wanted to discharge their student loan debt to prove to a judge that the education debt had created an “undue hardship”. The vague and high legal standard has been critiqued by a number of parties, including the American Bar Association.

Last November, the Departments of Education and Justice issued new guidance regarding bankruptcy for student-loan borrowers to attest to their hardships and help the agencies assess their discharge requests. It is a step in the right direction, and while the guidance could be helpful for some, the “undue hardship” requirement is still subjective, and the Biden administration's decision would not codify the changes into law, meaning the next administration can disregard these changes.

It would take an act of Congress to permanently rewrite this wrong and change the bankruptcy requirement for student loan borrowers.

In 2021, Democratic Sen. Richard J. Durbin and Republican Sen. John Cornyn sponsored the “FRESH START Through Bankruptcy Act” which would allow borrowers to discharge their federal student loans through bankruptcy after ten years. Although the legislation stalled in committee, the bill has clear bipartisan support and would have a monumental impact on borrowers struggling the most under the student debt crisis.

The ability to declare bankruptcy is a beacon of hope for people facing harsh economic setbacks, but student loan debt is still the only type of debt people cannot escape from through bankruptcy. With the fate of President Biden’s student debt forgiveness program in the air, a Congressional move to allow student loan debt to be discharged through bankruptcy would be a lifeline for student loan borrowers in the tightest of economic circumstances.

Sign the petition to Congress: Allow student loan debt to be discharged through bankruptcy.

Participating Organizations
Democracy for America Advocacy Fund
Daily Kos
National Campaign for Justice
OD Action
Solidarity Action