This bill would make it easier for student loan borrowers to discharge their debts through bankruptcy by removing the "undue hardship" requirement currently found in federal law. Currently, borrowers must prove "undue hardship"—a standard that courts have interpreted strictly, resulting in less than 0.1% of applicants successfully discharging student loans since 2011. The bill would replace this rigid standard with a more flexible hardship standard, giving bankruptcy courts greater discretion to approve debt relief. The change would apply immediately to all bankruptcy cases, whether filed before or after the law's enactment. Supporters argue the current standard is outdated and prevents millions of struggling borrowers—particularly those who didn't complete degrees or whose degrees didn't lead to better employment—from getting a fresh start, while the bill would still maintain other bankruptcy safeguards like means testing to prevent abuse.
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