Congressman: Fix The Student Debt Crisis With Bankruptcy Reform
July 25 (Bloomberg Law) — While economic indicators continue to worsen, US bankruptcy law still prohibits individuals from getting rid of their student debt except in the rarest of circumstances. U.S.Representative Steve Cohen, Democrat from Tennessee, talks with Bloomberg Law’s Lee Pacchia about a bill he introduced in Congress that aims to alleviate the current student debt crisis by allowing individuals to discharge private student loan debt in bankruptcy. The Private Student Loan Bankruptcy Fairness Act would restore US Bankruptcy code provisions that allowed individuals with private student loans the possibility to discharge, effectively reversing a 2005 change in the law. Private student loans account for roughly ten to fifteen percent of the total outstanding student loan debt in the United States.