Stopping Abusive Student Loan Collection Practices in Bankruptcy Act of 2026
HB 9111, the Stopping Abusive Student Loan Collection Practices in Bankruptcy Act of 2026, would amend the federal bankruptcy code to expand protections for debtors seeking relief from student loan debt. Specifically, it changes section 523(d) of title 11 so that the fee-shifting or cost-related protections in that section would also apply when a debtor asks a bankruptcy court to determine whether a student loan is dischargeable based on undue hardship under section 523(a)(8). In practical terms, the bill is aimed at making it less risky and less costly for borrowers to challenge student loan nondischargeability in bankruptcy.
The bill applies prospectively only to bankruptcy cases filed on or after the date of enactment. It does not change the substantive standard for proving undue hardship, but it would alter the litigation incentives in those cases by extending the relevant protection to debtors pursuing that type of dischargeability determination. Because it amends the federal Bankruptcy Code, it would affect bankruptcy courts, student loan creditors, and individual debtors nationwide rather than state law directly.
HB 9111 would amend title 11 of the U.S. Code, the federal Bankruptcy Code, by broadening section 523(d) to cover disputes over student loan dischargeability based on undue hardship. The practical effect is to reduce the financial exposure of debtors who bring these cases, potentially discouraging aggressive collection litigation and making it easier for borrowers to seek judicial review of student loan debt in bankruptcy. The bill would apply only to cases commenced after enactment, leaving prior cases unaffected.
The available context shows the bill was introduced and referred to the House Committee on the Judiciary, with no recorded votes or committee transcript excerpts available. Based on the bill text and title, the measure appears to be framed as consumer-protection legislation intended to curb abusive collection practices and improve access to bankruptcy relief for student loan borrowers. There is no direct evidence in the provided materials of formal support or opposition, but the policy direction suggests likely sympathy from debtor advocates and potential concern from student loan lenders and collection interests.
The main point of contention is likely whether expanding fee-shifting protections in student loan bankruptcy litigation would encourage legitimate hardship claims or instead increase litigation and costs for lenders and the system. Supporters would likely argue that borrowers need stronger protections against abusive collection tactics and that undue hardship cases are already difficult enough to bring. Opponents would likely contend that the bill could make it easier to challenge student loan debts in bankruptcy and could increase costs for creditors, potentially affecting the broader student loan market. No specific committee debate or vote record is provided, so these are inferred policy tensions rather than documented statements from the record.