Student Loan Bankruptcy Improvement Act of 2025

This bill would make it easier for people to erase student loan debt in bankruptcy. Today, most borrowers can only do this if they prove “undue hardship,” a very tough rule that few can meet, and many don’t even try to seek relief because it’s seen as nearly impossible. The bill pushes courts toward a fairer, nationwide standard so honest borrowers can get a real fresh start; in recent years, fewer than 0.1% of requests to wipe student loans in bankruptcy were approved, showing how rare relief is now.

• Who is affected: People with student loans who file for bankruptcy.
• What changes: It updates the bankruptcy law on student loans (11 U.S.C. 523(a)(8)) to replace the extremely strict “undue hardship” barrier with a more reasonable standard, while keeping other bankruptcy safeguards like means testing and disclosure rules in place .
• When: The change would apply to cases filed before, on, or after the date the bill becomes law, so people with open or future cases could benefit.