Stopping Abusive Student Loan Collection Practices in Bankruptcy Act of 2026
This bill requires student loan lenders to pay a borrower's attorney fees and court costs if the lender unreasonably fights the borrower's attempt to erase their student debt in bankruptcy. Borrowers must currently prove that repaying their student loans causes "undue hardship," which can lead to expensive legal battles against creditors. If a court finds that the lender's opposition was not substantially justified, the lender must cover the borrower's legal expenses.
What this bill touches.
Who it helps · who it burdens.
Who it helps
- Student loan debtors in bankruptcyMay be awarded attorney fees and legal costs by the bankruptcy court if they successfully prove undue hardship to discharge their student loan debt and the creditor's opposition was not substantially justified.
Who it burdens
- Student loan creditors and lendersMay be required by bankruptcy courts to pay the debtor's attorney fees and legal costs if their opposition to a student loan undue hardship discharge is found not to be substantially justified.
The provisions, in plain language.
Allows bankruptcy courts to require student loan lenders to pay a debtor's attorney fees and legal costs if the debtor successfully discharges their student loan debt due to undue hardship and the lender's opposition was not substantially justified, for bankruptcy cases filed on or after enactment.
How your members of Congress line up
How it moved.
- Referred to the House Committee on the Judiciary.
- Introduced in House
- Introduced in House