Allow bankruptcy for private student loans through executive order

Since the passage of Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, private student loan lending has surged. According to consumerfinance.gov, the number of private student loan lent without school involvement grew from 18% to 31% between 2007-2007. Private student loans offer fewer repayment options relative to federal loans. Private student loans must follow the undue hardship clause in order to be discharged through bankruptcy. Undue hardship is extremely challenging to prove and finding a lawyer who is willing to assist is equally as challenging. By using an executive order to allow for private student loans to be treated as other consumer debt, lenders will be forced to incur more risk and thus offer assistance to students in need as bankruptcies become more common.