Biden Administration's New Bankruptcy Policy Leads to 99% Approval of Student Loan Discharges

Despite promising results, increased awareness of the policy is needed, as only a fraction of the nearly 40 million federal student loan borrowers have filed for bankruptcy under the new process.

• New data from the Biden administration shows that 99% of student loan discharges have been approved under a new bankruptcy policy, making it easier for borrowers experiencing hardships to discharge their student loans.
• Since the policy was implemented a year ago, 632 cases have been filed, a significant increase from previous years.
• The majority of borrowers seeking discharge have received full or partial discharges.
• Despite the promising data, the report also suggests that more work needs to be done to make borrowers and practitioners aware of the new policy.
• The Justice Department and the Department of Education are working together to streamline the process and provide student loan borrowers a pathway to obtaining much-needed relief in bankruptcy.

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