Today, Congressman Ted Deutch (FL-21) joined Congressman Steve Cohen (TN-9) to introduce the Private Student Loan Bankruptcy Fairness Act. This legislation will change the federal bankruptcy code so that private student loans can be discharged in the case of bankruptcy. Differing from credit card debt, mortgages, and other forms of unsecured consumer debt, under current law, private student loan debt is not absolved when one files for bankruptcy.

With private student loan debt exceeding $150 billion nationwide, this bill will ensure that Americans are given the “fresh start” they are so desperate to attain when filing for bankruptcy. Private student loans are often tied to extremely high interest rates and the predatory practices of lenders. This legislation will protect Americans who are given no other option but to apply for a private loan. By amending Title 11 of the United States Code, the Private Student Loan Bankruptcy Fairness Act will undo unfair changes put in place in 2005 and encourage more Americans to pursue education.

A copy of the Private Student Loan Bankruptcy Fairness Act is available here.