Bankruptcy Code Should Offer Student Loan Exception: CFPB

Law360, New York (July 20, 2012, 5:58 PM EDT) -- Borrowers who took out private student loans should be able to discharge those loans if they file for bankruptcy, the Consumer Financial Protection Bureau and the U.S. Department of Education said in a Friday report likening private student loans to subprime mortgages.

According to the Dodd-Frank Act-mandated report from the two agencies, the outstanding student debt load in the U.S. ballooned to over $1 trillion in 2011, with over $150 billion worth of that debt issued by private companies. Much like the housing bubble, prior to...
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