H.R. 423 — Private Student Loan Bankruptcy Fairness Act of 2025

This section revises exceptions to discharge in bankruptcy for student loans under 11 U.S.C. 523(a)(8) by (1) striking subparagraph (B), which made qualified education loans (i.e., certain private loans as defined in the Internal Revenue Code) nondischargeable; and (2) in subparagraph (A), limiting nondischargeable loans under nonprofit programs in clause (i) to any program for which substantially all of the funds are provided by a governmental unit or nonprofit institution (from funded in whole or in part by such entities), redesignating clause (ii) as subparagraph (B), and striking "or" at its end. (Thus, most private student loans become dischargeable absent undue hardship, while narrowing nondischargeability for certain nonprofit-backed loans.)

This section provides that the Act and its amendments take effect on the date of enactment but apply only to cases commenced under the Bankruptcy Code (title 11, U.S. Code) on or after that date. (Thus, the amendments do not affect pending bankruptcy cases.)