Stopping Abusive Student Loan Collection Practices in Bankruptcy Act of 2026
- Bill Number
- H.R. 9111
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2026-06-02: Referred to the House Committee on the Judiciary.
- Last Updated
- 2026-07-01T16:11:01Z
AI-Generated Summary
Purpose of the Legislation This bill aims to deter abusive student loan collection practices during bankruptcy proceedings by amending the U.S. Bankruptcy Code.
Key Provisions Outlined
- The bill amends Section 523(d) of title 11 of the United States Code.
- It expands the circumstances under which a debtor may seek costs and attorney fees if a creditor's position on debt dischargeability is not substantially justified.
- The change specifically includes cases where the debtor requests a determination of dischargeability based on undue hardship for debts under subsection (a)(8), which typically covers student loans.
- The amendment applies only to bankruptcy cases filed on or after the date of enactment.
Significant Changes to Existing Law Introduced
- Current law limits fee-shifting protections in Section 523(d) to certain creditor-initiated requests for nondischargeability.
- The new language adds debtor-initiated undue hardship requests for student loans, creating a broader mechanism for debtors to recover expenses when they prevail.
- No other sections of the Bankruptcy Code are altered.
Potential Impacts on Government Agencies, Citizens, or International Relations
- Bankruptcy courts may see increased filings or litigation involving student loan discharge requests due to the added financial incentive for debtors.
- Student loan borrowers could face fewer aggressive opposition tactics from lenders during bankruptcy.
- Federal student loan programs administered by agencies such as the Department of Education could experience shifts in how dischargeability challenges are handled.
- No direct effects on international relations are indicated in the bill.
Main Stakeholders Affected
- Individuals with student loan debt seeking bankruptcy relief.
- Lenders and creditors holding student loans.
- Bankruptcy courts and trustees responsible for administering cases.
- Government entities involved in student loan origination or guarantee programs.
Notable Legal, Constitutional, or Political Implications
- The bill modifies fee-shifting rules in bankruptcy to address perceived imbalances in student loan cases, potentially encouraging more undue hardship proceedings.
- It operates within existing constitutional authority over bankruptcy matters under Article I, Section 8 of the U.S. Constitution.
- The change could influence the practical application of the general rule that student loans are nondischargeable absent a showing of undue hardship.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-06-02: Referred to the House Committee on the Judiciary.
- 2026-06-02: Introduced in House
- 2026-06-02: Introduced in House
Bill Versions
- Stopping Abusive Student Loan Collection Practices in Bankruptcy Act of 2026 — issued 2026-06-02 — PDF (2 pages)