Senator Tom Harkin (D-Iowa), Chairman of the Senate panel on education, will propose a bill to the U.S. Senate to allow some student loans to be dischargeable when filing bankruptcy. Currently, filing bankruptcy does not generally discharge student loan debt. Senator Harkin’s bill, as proposed, would allow private lender student loans to be discharged after filing bankruptcy. According to a recent article in the Wall Street Journal, these types of loans only represent 10-15% of all student loans, with the U.S. Department of Education holding the rest.
According to the Wall Street Journal, the bill also proposes measures to lower student costs, impose tighter restrictions on schools with high student loan default rates and impose standards on schools to publish data on the outcome of these students.
Senator Harkin stated he was leaving the Senate after five (5) terms. As a result, the chance of the bill maintaining momentum is unclear.
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