H.R. 9111: Stopping Abusive Student Loan Collection Practices in Bankruptcy Act of 2026

This bill, titled the Stopping Abusive Student Loan Collection Practices in Bankruptcy Act of 2026, seeks to amend the U.S. Bankruptcy Code, specifically regarding student loans. Here are the key points of what the bill proposes:

Purpose of the Bill

The primary aim of the bill is to address and reduce what are described as "abusive student loan collection practices" in bankruptcy cases. This reflects concerns about how student loan debts are treated within the bankruptcy framework, especially regarding the discharge of these debts when individuals or entities declare bankruptcy.

Change to Bankruptcy Code

The bill proposes a specific amendment to Section 523(d) of title 11 of the United States Code. This amendment will alter the language around determination of dischargeability for student loan debts.

• The current text allows for a determination of dischargeability concerning hardships related to student loans.
• The proposed change aims to make it clearer that if a debtor claims undue hardship related to their student loan debt, they can seek a formal evaluation of whether such debt can be discharged in bankruptcy.

Effective Date

The law will become effective once it is enacted. However, it will only apply to cases that are initiated after the enactment date. This means that any ongoing bankruptcy cases at the time of the law's passing would not be affected by the new provisions.

Summary of Implications

In summary, the bill aims to provide a more supportive framework for individuals facing overwhelming student loan debts by clarifying their rights in bankruptcy proceedings. This could potentially ease the financial burden on those who can demonstrate undue hardship, by allowing their student loans to be evaluated for discharge in bankruptcy.

Relevant Companies

None found.