Legislation for student loan debt relief has just been introduced in the U.S. Senate. The legislation was introduced by Democrat Dick Durbin from Illinois, and Republican John Cornyn from Texas. The FRESH START Through Bankruptcy Act of 2021 will reinstate bankruptcy discharges for federal student loan debt. This is huge!
Since 1998, federal student loans have not been dischargeable in bankruptcy. Getting rid of federal student loans since then has been between very difficult and impossible, even if you couldn’t afford to make the payments for them. If this legislation becomes law, the huge burden of federal student loan debt that many people suffer will be able to be lifted by filing bankruptcy.
To be clear, under this legislation you may not discharge federal student loan debt until ten years after your first payment becomes due. This would require you to make a serious effort to pay this debt before attempting to discharge it.
This legislation does not appear to affect private student loans. If not, private student loans would remain non-dischargeable in bankruptcy, meaning that filing bankruptcy would not eliminate them.
Contact your U.S. senators and representatives today and tell them to support and vote for the FRESH START Through Bankruptcy Act of 2021. If you need help because you can’t pay your debts, contact a bankruptcy attorney today.