Before changes were made in 2005, only government issued or guaranteed student loans were protected during bankruptcy. Government should restore the bankruptcy law so that privately issued student loans will once again be dischargeable in bankruptcy. Private loans do not have the protections that government borrowers enjoy, including caps on interest rates, flexible repayment options, and limited cancellation rights.
There are very few types of debts that the bankruptcy law subjects to a different standard, allowing for discharge in only the most extreme circumstances. For example, the bankruptcy code makes it especially difficult for people to escape child support responsibilities, overdue taxes, and criminal fines. Privately issued student loans should not be on that list.