[Congressional Record Volume 164, Number 126 (Thursday, July 26, 2018)]
[Extensions of Remarks]
[Pages E1092-E1093]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          INTRODUCTION OF STUDENT LOAN BANKRUPTCY ACT OF 2018

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                          HON. J. LUIS CORREA

                             of california

                    in the house of representatives

                        Thursday, July 26, 2018

  Mr. CORREA. Mr. Speaker, student loan debt has risen dramatically 
over the past decades. Today, many borrowers find themselves unable to 
repay their student loans. In the past, Congress has determined that 
allowing borrowers to easily discharge student loans under bankruptcy 
could threaten the student loan program and therefore have made student 
loans non-dischargeable. This decision has limited the circumstances in 
which a borrower may discharge their student loan debt.

[[Page E1093]]

That is why I am introducing the ``Student Loan Bankruptcy Act,'' a 
bill to provide both private and federal student loan borrowers an 
opportunity to obtain relief from insurmountable debt.
  Currently, student loans are among the types of debt that require 
debtors to provide proof of an ``undue hardship.'' The interpretation 
of undue hardship has varied drastically in the courts throughout the 
United States. My bill would allow a borrower with student loan debt to 
file for bankruptcy after five years in the same way they would with 
any other type of debt. Of course, just because one files for 
bankruptcy, does not mean one will be granted it and their debt will be 
discharged. However, the opportunity to file for bankruptcy can provide 
relief for debtors who are truly struggling and can no longer afford to 
pay off their debt.
  During the 1980s, debtors had a temporal discharge option. It used to 
be law that debtors had two options for discharging student loans: the 
borrower would (1) demonstrate an undue hardship or (2) prove that the 
loan first became due at least five years before the debtor filed for 
bankruptcy. This in turn made student loan debt dischargeable as all 
other types of ways to file for bankruptcy, after five years.
  Mr. Speaker, one should never fear to pursue an education because of 
the cost. Borrowers with growing student loan debt should have the 
opportunity to file for bankruptcy without the need to jump through 
bureaucratic hoops.

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