To amend title 11, United States Code, to bring fairness and compassion to the treatment of student loans in bankruptcy, and for other purposes.

 

A BILL

To amend title 11, United States Code, to improve the

treatment of student loans in bankruptcy, and for other

purposes.

 

1 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

 

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘FAIRNESS AND COMPASSION IN STUDENT LOANS Bankruptcy Act of 2024’’ or the ‘‘FRESH START Through Bankruptcy Act’’.

 

SEC. 2. EXCEPTIONS TO DISCHARGE.

Section 523(a) of title 11, United States code, is

amended by striking paragraph (8) and inserting the following:

‘‘(8) for an educational benefit overpayment or

loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or any other institution, or for an obligation to repay funds received as an educational benefit, scholarship, or stipend received from a governmental unit or made by any other

institution, unless—

‘‘(A) excepting such debt from discharge

under this paragraph would impose an undue

hardship on the debtor and the debtor’s dependents; or

 

‘‘(B) the first payment on such debt became due before the 7 -year period (exclusive of any applicable suspension of the repayment period) ending on the date of the filing of the petition;

 

 

 

 

 

11 SEC. 3. EFFECT OF DISCHARGE OF CERTAIN STUDENT

12 LOANS.

13 Section 524 of title 11, United States Code, is

14 amended by adding at the end the following:

15 ‘‘(n)(1)

10 ‘‘(C) The term ‘student loan’ means the

11 original principal of a loan as defined in 11 USC 523(a)(8) herein

 

 

1 ‘‘(2) If a student loan is discharged in a

2 bankruptcy case under this title, the institution

3 of higher education which the debtor of the bankruptcy

4 case attended using the particular student loan proceeds shall

5 pay to the Department of Education an amount determined in accordance with the following:

7 ‘‘(A) An amount equal to 50 percent of the

8 amount of the discharged student loan,

 

20 SEC. 4. EFFECTIVE DATE; APPLICABILITY.

21 This Act and the amendments made by this Act

22 shall—

23 (1) take effect on the date that is 90 days

24 after the date of enactment of this Act; so long as the no Federal government funds are being lent, and, there are no Federal government guarantees of any funds, used to attend any post high school educational institution of any kind.

 

20 U.S. Code § 1091a – Statute of limitations, and State court judgments

(3) ELIMINATION OF STATUTE OF LIMITATIONS FOR STUDENT LOAN COLLECTIONS

 

(3)a(2) Is amended to strike: “(2) Notwithstanding any other provision of statute, regulation, or administrative limitation, no limitation shall terminate the period within which suit may be filed, a judgment may be enforced, or an

offset, garnishment, or other action initiated or taken by—

 

substituting:

 

(2) Notwithstanding any other provision of statute, regulation, or administrative limitation, there is a ten year statute of limitation, from the date of the last payment, not counting any time during which the loan was in forbearance, within which suit may be filed, a judgment may be enforced, or an

offset, garnishment, or other action initiated or taken by—