In 1976, Congress amended the Higher Education Act to make federal student loans nondischargeable through bankruptcy unless the borrower meets the undue hardship standard. The standard requires them to prove that they cannot maintain a minimal standard of living, their circumstances will likely not improve, and they have made a good-faith effort in repaying their debt.
Nearly three decades later, Joe Biden — then a senator serving Delaware — had a large role in making it that standard stricter. In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, and its implications for student-loan borrowers were dire. As signed into law under former President George W. Bush, the bill expanded the undue hardship requirement to borrowers with private student loans, expanding the scope of borrowers who would have to prove their impossible predicament in court.
During his 2020 presidential campaign, Biden defended his vote for the bill, saying in a Democratic primary debate that he “improved it.”
“I had a choice, it was going to pass — Republican president, Republican Congress, and I offered two amendments to make sure that people under $50,000 would not be affected and women and children would go to the front of the line on alimony and support payments,” Biden said in March 2020. “I did not like the rest of the bill, but I improved it, number one.”
Sen. Bernie Sanders of Vermont, one of Biden’s 2020 rivals who pushed for expansive student debt cancellation, blasted the 2005 bankruptcy law, along with Biden’s support of it.
“That bankruptcy bill made it impossible or very difficult for people to escape from that student debt,” Sanders said during the primary debate. “It was a very, very bad bill.”