To: The United States House of Representatives

Congress: Restore Bankruptcy Relief For Student Loans Now

Recent news stories point out that a record number of debtors (7 million) were 90 days delinquent on new car loans -- and the majority were borrowers under 30. The burden of student loan debt has a lot to do with it -- $1.56 trillion and counting.

Changes to the bankruptcy law since 1978 have continued to narrow the standard for bankruptcy relief from student loan debt to one almost impossible -- and far too expensive -- to meet. The rationale was the students would use bankruptcy fillings frivolously and damage the student loan system. The record does not support that conclusion.

The bottom line is, student debt has hobbled generations of graduates who are still paying back their loans. The automobile industry is struggling to remain solvent because young people don't make enough to buy cars. Young people live in house shares and postpone marriage and families because they're cash-strapped.

The Debt Collection Improvement Act of 1996 even allows Social Security payments to be withheld to repay federal education loans! (If by the time you collect Social Security, you still have student debt, it indicates a problem with the system, not deadbeat individuals.)

We need to amend the federal bankruptcy code to eliminate the provision that makes many education debts non-dischargeable in bankruptcy unless repayment imposes an undue hardship.

Student debt is a major economic problem, preventing young people from attaining the benefits of adulthood their parents took for granted.

A Look at the Shocking Student Loan Debt Statistics for 2019:
https://studentloanhero.com/student-loan-debt-statistics/

Surge in Auto Loan Delinquencies: Auto Loans in High Gear
https://moneymaven.io/mishtalk/economics/surge-in-auto-loan-delinquencies-auto-loans-in-high-gear-3zFfHSY590yrF7NDDTSLwQ/

The History of Student Loans and Bankruptcy Discharge
https://www.linkedin.com/pulse/history-student-loans-bankruptcy-discharge-steven-palmer/

Why is this important?

As Sen. Elizabeth Warren pointed out, bankruptcy is almost always a last resort and not the refuge of deadbeats. Reforming our bankruptcy code to include all student loans is not only the simplest and fairest solution, it is something that will solve the problems of debt-burdened citizens and free up economic growth that is now held back by obscene student debt.