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STOP Collector Blog From the law firm of Lemberg & Associates

Senate Introduces Private Student Loan Debt Legislation

Senators Dick Durbin (D-IL), Tom Harkin (D-IA) and Al Franken (D-MN) have introduced the Fairness for Struggling Students Act of 2013. According to a press release issued by Senator Durbin, the bill seeks to reverse a 2005 change to bankruptcy laws that prevented private student loans from being discharged in bankruptcy proceedings. While government issued or government guaranteed student loans have long been protected in a bankruptcy, meaning that bankrupt borrowers were still responsible for repayment, until 2005 private student loans were treated like other types of debt. According to Durbin’s office, “In 2005, the law was unjustifiably changed to give private student loans the same privileged bankruptcy treatment as government loans, even though private student loans have vastly different terms and fewer consumer protections.”

According to the Huffington Post, among those organizations that support the bill are the American Association of University Women, the Consumer Financial Protection Bureau, the U.S. Department of Education, and Sallie Mae.

The bill was introduced in the previous Congress, but failed to pass out of committee.

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Author
Sergei Lemberg

Sergei Lemberg is the principal at Lemberg & Associates, a consumer law firm that defends consumer rights in the areas of fair debt collection law, fair credit law, and lemon law, among others. He is regularly labeled by the debt collection industry as one of the “most active consumer attorneys” in the U.S.

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