Consumer Bankruptcy Journal Spring 2017 - Page 7

PRESIDENT TRUMP IS RIGHT system affords that remedy . But , that is not the case when it comes to student loans , where borrowers must overcome substantial hurdles if they need bankruptcy protection .

The National Association of Consumer Bankruptcy Attorneys ( NACBA ) flagged the troubling parallels between the rise of student loan debt and the mortgage crisis half a decade ago in 2012 . Over the last few years NACBA has reported on the growing numbers of Americans who are now seeking help with unmanageable student loan debt .
Of course , it is true that not all student loan borrowers will need bankruptcy protection , and that a small number of other programs , including refinancing to lower interest rates and repayment plans based on the income of the borrower , are available to some borrowers under certain circumstances . But for every borrower granted assistance through a program , there are scores or even hundreds of others left with unmanageable or unrealistic payoff plans with no alternative .
To be sure , the student loan debt crisis is a multi-faceted problem and will require a number of tailored approaches to address it . Restoring the bankruptcy discharge for student loans is an important piece of the puzzle – a targeted solution that would provide immediate relief to the most distressed student loan borrowers .
Congress must act now to defuse the student loan debt bomb . The good news is that S . 729 , The Fairness for Struggling Students Act , introduced by Senator Durbin ( D-IL ) and cosponsored by several of his colleagues , would restore bankruptcy protection for private student loans . Also , H . R . 449 , The Discharge Student Loans in Bankruptcy Act , introduced by Congressman John Delaney ( D-MD ), would restore bankruptcy protections for both private and federal student loans .
President Trump has taken the important first step of highlighting the student loan debt crisis , and making a sweeping policy proposal to cap student loan repayment plans at 12.5 percent of income . Now , it ’ s time for Congress to respond . Doing so will be a real shot in the arm for the economy , and it will help ease the way for millions of young people to move ahead with their dreams of marriage , family , a first home , children , and all the rest of the American Dream .
National Association of Consumer Bankruptcy Attorneys Spring 2017 CONSUMER BANKRUPTCY JOURNAL 7