With Congress in a political stalemate throughout the year, NACBA stepped up its efforts for an administrative solution to the longstanding issues highlighted by Rep. Conyers’ bill: how to make the undue hardship discharge a workable solution. Toward that end, NACBA worked with congressional allies who, in May 2014 wrote to Education Secretary Duncan asking the Department to issue guidance to student loan creditors regarding the undue hardship. The guidance would include criteria suggested by NACBA establishing the circumstances in which an undue hardship exists and the creditor should accept such a determination. As a way of amplifying this message, NACBA participated in roundtable meetings with officials from the White House Domestic Policy Council, the Department of Education, the Consumer Financial Protection Bureau, and the Department of the Treasury. Engaging with allies such as the National Consumer Law Center, NACBA stressed the importance of accountability for Department of Education student loan servicers and their often aggressive challenging of undue hardship cases. Though widespread changes in agency polices take time and diligent effort, NACBA continues a dialogue with the Department of Education on the undue hardship issue and seeks out every opportunity to make progress on student loan issues through administrative action.
NACBA also continues to aggressively position our members and bankruptcy as key solution in the larger context of what has become constant media coverage of student loan debt and its growing impact on Americans of all ages. Over the course of the year, NACBA jumped on multiple media opportunities, securing major stories in The New York Times, US News and World Report, and the Associated Press. As our track record (and our ongoing, friendly requests for illustrative client stories) shows, NACBA has and will continue to proactively push our message to the media and therefore influence the broader debate.
In addition to reaching out to members of the House and Senate Judiciary Committees, which have jurisdiction over the bankruptcy code, NACBA worked closely with the Senate Committee responsible for reauthorizing the Higher Education Act (HEA), which governs the nation’s higher education system. As a result, the draft reauthorization bill, which comprehensively addresses a range of issues surrounding college affordability, accountability and our nation’s growing student loan debt, includes a provision restoring bankruptcy protections for private student loans. Specifically, the bill includes the text of S.114, the Fairness for Struggling Students Act, introduced by longtime NACBA ally Senator Richard Durbin (D-IL). S.114 was a main focus of NACBA’s 2014 Hill Day at Home, a huge success in conducting outreach to members of Congress around the country and in gaining co-sponsors for the legislation. In addition to our ongoing advocacy for S.114, NACBA will continue to push for S.114’s inclusion in the Higher Education Act reauthorization, as this process, which usually takes several years, unfolds.
Most recently, NACBA engaged with the Senate Committee on Aging, a newer venue for the student loan debt issue and its unique impact on older Americans. Given the near constant media attention and increasing validation by academics, advocates, and others on the broader economic impact of student loan debt, we fully expect that efforts to address our nation’s student loan system will continue to be on the agenda in the next Congress. Bureau, and other agencies that play a role in ensuring a fair and effective bankruptcy system.
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Student Loans & Stalemate
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