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Following Student Defense Reports, Senate Judiciary Chair Calls Hearing On Student Loan Bankruptcy Reform

FOR IMMEDIATE RELEASE:
July 28, 2021

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press@defendstudents.org | 202-734-7495

Following Student Defense Reports, Senate Judiciary Chair Calls Hearing On Student Loan Bankruptcy Reform

U.S. Senator and Senate Judiciary Committee Chairman Dick Durbin (D-Illinois) will hold a hearing on August 3, to discuss how Congress and the Department of Education can ease the path of borrowers to discharge their student loans in bankruptcy. This follows Student Defense’s recent report, The Missing Billion, which shed light on how the Department of Education continues to contest undue hardship claims from distressed borrowers during the pandemic, even while it has allowed institutions and their officials to avoid paying over $1 billion in liabilities. In recent months, during the COVID-19 economic crisis, the Biden Department of Education opposed the discharge of a single mother of three, arguing that she should have tried harder to get child support and that her 15 year old son should find a job. In another case, the Department argued a student borrower was tithing too much to her church.

Student Defense President Aaron Ament and Vice President and Chief Counsel Dan Zibel also recently co-authored a Minnesota Law Review essay with Cardozo School of Law Professor Pamela Foohey — on the challenges students face when attempting to have their student loans discharged in bankruptcy court. The essay outlined reforms that the Department of Education can enact to alleviate the burdens on borrowers — having a presumptive position of “no contest” in bankruptcy cases and standardizing and streamlining the Department’s debt discharge criteria.

“We’re grateful for Senator Durbin and the committee’s commitment to examine how Congress and the Department of Education can take meaningful steps to ensure that student loan borrowers facing bankruptcy are able to get a second chance and move on with their lives,” said Student Defense President Aaron Ament.

This week, Data for Progress released a poll with Student Defense and the Progressive Change campaign committee that indicates 61 percent of the public supports treating student loan debt the same as other debts in bankruptcy proceedings.