“To provide a more equitable discharge standard for student loan borrowers.”
No CRS summary available for this bill.
This section states congressional findings concerning the inadequacy of the current "undue hardship" standard (including the Brunner test used by most bankruptcy courts) for discharging student loans, citing success rates of only 0.01% as of 2022 and attorney discouragement of filings; the status of approximately 6 million federal student loan borrowers past due by 90 days or more as of June 2025, with up to 10 million potentially in default soon; low filing rates (less than 1% of 250,000 annual bankruptcies and 2,500 cases from November 2022 to September 2024 among 43 million borrowers); and the need for a new "hardship" standard to provide debtors a fresh start while maintaining bankruptcy protections such as means testing.