Proposed Bill Eliminates Student Loan Discharge Exception

Posted by NCBRC - September 15, 2015

On September 8, 2015, Michigan Congressman Dan Kildee introduced a bill in Congress intended to reduce the burden on students and their families caused by the ever-increasing costs of higher education and the financial stress of student loans. H.R. 3451. The proposed legislation removes student loans from section 523(a)’s exceptions to discharge, thereby clearing the way for student loans to be discharged in bankruptcy just as credit card debts and car loans are currently dischargeable. In a statement issued by Mr. Kildee’s office, the necessity for the legislation was founded on his concern that “[s]tudent loan debt has soared in recent years, and there are now over 40 million federal and private student loan borrowers who collectively owe $1.2 trillion in student loans. The average student has $28,400 of loan debt, and total student loan debt in the U.S. has now surpassed credit card and auto loan debt totals.” In a press conference, Mr. Kildee explained: “It’s increasing[ly] clear that well educated society is absolutely necessary to a sustainable economy and to an equitable society that more fairly allocates the vast wealth that we create in this nation. The path to doing that is to make college affordable to more and more people. I think it’s important for us to remind ourselves that a college education for a young person in our state is valuable not just to them [but] for all of us and we should be willing to invest in it.”

Mr. Kildee also introduced two other bills dealing with student loans, one of which would exempt Pell Grants and scholarships from income taxes, and the other which would eliminate some private lenders’ unfair practice of automatically treating loans as being in default when a student’s cosigner dies even where the payments on those loans are current.



  • Nick
    Posted September 16, 2015 at 12:18 pm | Permalink

    Thank God someone is listening.
    Having over $120k in loans STILL after paying for 20 years (grad school in there added to the total), I am forever burdened by what seems to be the never ending monthly payments.

  • Michelle LaSeur
    Posted September 16, 2015 at 8:35 pm | Permalink

    Student loans are unfair and HUGE. They can take your Social security if you can’t pay. We bailed out the robbing thieving banks, BAIL US OUT

  • Dale
    Posted September 16, 2015 at 9:33 pm | Permalink

    I hope it passes

  • sharyn
    Posted September 16, 2015 at 9:46 pm | Permalink

    I have been struggling with 130K of student loans now for 2 decades. i went to school to be an artist. I make less than 30K a year and will be 52 this year. I can not own a home or get a credit card. I will never pay these off in my lifetime. Please lets pass this legislation.

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