An amendment has been introduced that would give important protections to private student loan borrowers.
Since student loan companies lobbied their way into the Bankruptcy Bill in 2005, borrowers have been virtually unable to discharge private student loans through bankruptcy. Instead of treating these loans like credit cards or any other form of consumer debt, they are treated more like a criminal fine. This leaves borrowers few ways to deal with what are often high-cost loans if they run into financial troubles.
Later this week, the House of Representatives is taking up its version of the reauthorization of the Higher Education Act - the law that governs almost every federal program and policy towards higher education. We have a chance, if we act fast, to change this situation. Rep. Danny Davis proposed an amendment that would extend bankruptcy protections to private loan borrowers.
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