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It could become easier for people with student debt to file for bankruptcy

Saturday, May 11, 2019
Annie Nova | CNBC
Cheye-Ann Corona

Lawmakers have introduced a bill that would make it easier for student loan borrowers to cancel their debt in bankruptcy.

The measure, which is supported by 14 Democrats, one Republican and one independent, is dubbed the Student Borrower Bankruptcy Relief Act of 2019.

“Americans struggling financially should have the option to discharge their student loans during bankruptcy as a last resort,” said John Katko, R-New York. “This bipartisan legislation makes that change.”

A number of consumer advocacy groups, including Americans for Financial Reform, the National Consumer Law Center and the Center for Responsible Lending, praised the bill.

“It’s important to have legislation that will provide vulnerable student loan borrowers who cannot repay their debt with a pathway to reestablish their financial stability,” said Cheye-Ann Corona, a senior policy associate at the Center for Responsible Lending.