Economic relief through bankruptcy will help with the student loan crisis.
San Diego, CA, January 28, 2015 – Representative John K. Delaney (MD-6) has filed legislation in Congress spotlighting the omnipresent financial crisis with student loan debt. Unlike mortgage, credit card and auto loan debt, the current law does not allow for student loan debt to be discharged. The Discharge Student Loans in Bankruptcy Act (H.R. 449) would most likely render student loans dischargeable under bankruptcy.
“Student loan debt is dragging down economic growth, keeping the American Dream out of reach for many and is a monthly strain for millions,” Congressman Delaney said in a recent statement. “While student loan debt is a complex problem that will require many solutions—increased support for grant programs, efforts to increase affordability, improved consumer education—we also need to reform our laws to help those with the absolute greatest need. Right now, there is effectively a huge student loan loophole in bankruptcy law that’s hurting real people."
As the cost of college tuition continues to rise, the student loan debt burden on students and their families also continues to rise. Student loan debt affects not only recent graduates but also every age generation, even senior citizens. This legislation would truly help people struggling with this issue.
"Bankruptcy has long been an option of last resort for individuals facing an irresolvable level of debt; bankruptcy isn’t easy or enjoyable, but it’s a necessary part of our financial system," Delaney continued. "It doesn’t make sense for students with heavy debt burdens to be worse than someone with credit card, auto loan debt or mortgage debt. Every member of Congress from every state in the country has constituents who are struggling severely because of student loan debt. At the very least we should have some basic fairness in the law.”