Private Student Loan Bankruptcy Fairness Act of 2023 This bill modifies the treatment of certain student loans in bankruptcy. Specifically, it allows private student loans to be discharged in bankruptcy regardless of whether a debtor demonstrates undue hardship. Under current law, student loans may be discharged in bankruptcy only if the loans impose an undue hardship on the debtor.
Impact
If enacted, HB138 would significantly alter the landscape of bankruptcy law related to student loans, which has historically favored federal loans over private loans. By enabling the discharge of private loans, it would empower borrowers who may have been trapped in a cycle of debt, particularly those attending non-traditional or for-profit institutions where private loans are common. This amendment aims to ensure that individuals facing financial distress have a fair opportunity to manage their debt loads and prevent an overwhelming financial burden from negatively impacting their lives for an extended period.
Summary
House Bill 138, titled the 'Private Student Loan Bankruptcy Fairness Act of 2023', seeks to amend Title 11 of the United States Code concerning the dischargeability of certain educational payments and loans. This legislation aims to allow for the discharge of private student loans in bankruptcy cases without requiring borrowers to demonstrate undue hardship, which is a significant change from current law that applies to federal student loans. The proponents of the bill argue that this change would provide much-needed relief for individuals burdened by private student loan debt, making it easier for them to regain financial stability.
Contention
Despite the potential benefits, the bill is not without its critics. Opponents may raise concerns that such wide-ranging dischargeability could encourage irresponsible borrowing and affect lenders' willingness to provide private loans in the future. Additionally, there may be apprehensions regarding the potential increase in bankruptcy filings, which could have broader economic implications. Thus, while there are arguments for the necessity of this bill to address the challenges faced by student borrowers, the debate will likely engage stakeholders from various perspectives, including lawmakers, educational institutions, and the lending industry.
Stopping Abusive Student Loan Collection Practices in Bankruptcy Act of 2023 This bill requires a bankruptcy court to grant a debtor attorney's fees and the costs of the proceeding if (1) the debtor's student loan debt is discharged on the basis of undue hardship, and (2) the court finds that the creditor's position was not substantially justified.
Small Business Flexibility ActThis bill provides statutory authority for the pooling of tips among two pools of employees. The first pool consists of employees who customarily and regularly receive tips (as is permitted under the current statute). The second pool consists of (1) employees who customarily and regularly receive tips and are paid at least minimum wage, and (2) employees who do not customarily and regularly receive tips.
Endowment Tax Fairness ActThis bill increases the excise tax on the net investment income of certain private university and college endowments. Under current law, certain private universities and colleges with 500 or more tuition-paying students (of which more than 50% are located in the United States) and endowments that are at least $500,000 per student pay an excise tax in the amount of 1.4% on the net investment income from such endowments.The bill increases the amount of the excise tax to 21% of the net investment income from such university and college endowments. Further, the bill provides that amounts collected from the increase to the excise tax on the net investment income from such university and college endowments are (1) to be deposited into the general fund of the Treasury; and (2) used to reduce the national deficit and, subsequently, the national debt.