By Josh Kilroy
Americans for Fair Debt Relief, a Super PAC that advocates for student loan borrowers, today released a statement on recent reforms on how the U.S. Department of Education handles requests to discharge student loan debt. The reforms, enacted last November, are designed to make it easier for borrowers to document their financial situation and loosen the definition of “undue hardship,” the standard by which discharge is allowed.
According to a recent article in The New York Times, the reforms have slowly started to increase the number of borrowers experiencing relief. In recent years, roughly400 people a year have had their student loan debt discharged. Senator Elizabeth Warren has asked Attorney General Merrick Garland for an update on the implementation of these new reforms.
AFDR appreciates the efforts of the Biden Administration to free as many borrowers as possible from the crushing burden of student loan debt. The President understands that these are honest, hard-working Americans caught in a system designed to enrich Wall Street banks and senior college administrators at the expense of young students.
But these reforms will only help a small percentage of those experiencing crisis. There are at least 3-5 million people who would benefit from real bankruptcy reform and potentially as many as 10-12 million people. A new report by Credit Karma reveals that 56% of borrowers will have to choose between paying their student loans or paying their rent or buying groceries.
Real bankruptcy reform treats student loan debt like medical and credit card bills and allows them to be discharged without a special appeals process to the Department of Education. This change can only come from Congress passing legislation. Senators Dick Durbin and John Cornyn proposed a good bill in 2021 and we urge them to reintroduce this bill as soon as possible.
Americans for Fair Debt Relief was formed on July 2nd of this year after the Supreme Court struck down President Biden’s plan to forgive $10,000 ($20,000 in the case of Pell Grants) in student loan debt for eligible borrowers. Its mission is to promote two policies: debt forgiveness for seniors; and make student loan debt fully dischargeable in bankruptcy proceedings. It was founded by veteran Democratic political consultant Josh Kilroy, who has worked on municipal and state legislative races in states across the country.
Our website is www.americansforfairdebtrelief.org.
Josh Kilroy is founder of Americans for Fair Debt Relief.
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