When signing on the dotted line for a student loan the terms are quite clear. The contract explicitly states the only way to not repay an owed debt is to die. Discharging the debt through bankruptcy is not an option, but it soon may be.
Two democratic congressman, Steven Cohen of Tennessee and Danny Davis of Illinois, have introduced legislation to the U.S. House of Representatives that would allow privately issued student loans to be eligible to be discharged as any other type of private debt. Loans issued directly by the U.S. government would not be eligible under the proposed law.
The bill is called HR 532, and was proposed on Feb. 6 2013. Of the estimated $1 trillion in student loan debt, $150 billion is privately held debt that would be eligible for bankruptcy under this new provision according to insidearm.com.
Presently the bill has been co-sponsored by 14 other democratic members of congress. Their names are:
- Congresswoman Madeleine Bordallo, Georgia
- Congresswoman Judy Chu, California
- Congressman Joe Courtney, Connecticut
- Congressman Keith Ellison, Minnesota
- Congressman Rush Holt, New Jersey
- Congressman Henry Johnson, Georgia
- Congresswoman Barbara Lee, California
- Congresswoman Zoe Lofgren, California
- Congressman George Miller, California
- Congressman Charles Rangel, New York
- Congressman Henry Waxman, California
This is the fifth time that legislation such as this has been brought forward, but Cohen believes that the current climate in the House may find bipartisan agreement. The Congressman's optimism not withstanding, the bipartisan govtrack.us gives the bill a 3% of getting out of committee, and a 1% chance of reaching President Obama's desk.
From 2011 - 2013 only 11% of bills made it out of their respective committees and only 2% were enacted.
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