This bill would make student loans dischargeable in bankruptcy by removing the current legal exception that prevents borrowers from eliminating student debt through bankruptcy proceedings. Currently, federal law prohibits the discharge of student loans unless the borrower can prove "undue hardship," a difficult standard that few borrowers successfully meet. The legislation would apply to bankruptcy cases filed after the bill becomes law, allowing future borrowers to treat student loans like other debts they might discharge in bankruptcy. The bill has no specific funding requirements since it changes bankruptcy law rather than appropriating money. This change would primarily affect student loan borrowers struggling with debt, as well as federal student loan programs and private lenders that issue education loans.
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