Student-Loan Holders See New Path for Wiping Out Debt Through Bankruptcy

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The Biden administration’s decision to make it easier to discharge student loans in bankruptcy could offer a new safety valve for debtors who have exhausted other options for getting out from under heavy debt loads.The move, announced Thursday, comes as President Biden’s broader plan for mass student-debt cancellation is in limbo after being blocked by two separate federal courts.

That plan calls for canceling up to $20,000 in debt for borrowers under certain income thresholds. It would render up to 20 million people free of debt, around half of all student-loan borrowers, if courts allow it go forward.

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