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Congress Gets More Pressure from the House to Forgive Student Loans in Bankruptcy

Posted By Allmand Law Firm, PLLC || 17-Apr-2014

Congress Gets More Pressure From The House To Forgive Student Loans In Bankruptcy

More individuals in the House of Representatives are voicing their opinions on why student loan debt should be forgiven in bankruptcy. In recent months more efforts are being made to provide Congress with more insight on how student loan debt continues to be a huge problem.

House Democrat Naomi Jakobsson proposed House Resolution 620 which advocates change of the bankruptcy rules by the government. Under the federal bankruptcy code, student loan debt is a consumer debt not eligible for discharge, unless met by strict circumstances.

Jakobbson feels most students that take out student loans do so in good faith. Most people want their population to be educated, but at the same time people cannot help themselves when they fall on hard times. Her resolution recently passed on the floor but sparked debate.

House Republican Dennis Reboletti feels people may get the wrong idea about college and assume it is a free ride. He claims he worked two jobs to pay for his education. House Republican David Harris feels student loan debt is being inherited differently than a house or car loan. The bank gets the house when the mortgage isn't paid and the car gets repossessed by the lender.

US Senator Elizabeth Warren wasn't happy recently when voicing her opinion at a speech given at Suffolk University Law School. During her speech she blasted government profits on the loans. Warren feels the burden is crushing students. She called for an end to government profits on loan interest, penalties for colleges with high loan default rates, and reinstatement of bankruptcy protection as an option for student borrowers.


Categories: Student Loans
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