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National Association of Consumer Bankruptcy Attoreny's (NACBA) Position on Biden v. Nebraska and the Future of Discharging Student Loan Debt in Bankruptcy

Posted by Jeffrey Butwinick | Jul 12, 2023 | 0 Comments

WASHINGTON, DC—The U.S. Supreme Court recently issued its opinion in Biden v. Nebraska in which it ruled that President Biden's plan to cancel up to $20,000 in student loan debt per borrower under the CARES Act was beyond his constitutional authority. NACBA is disappointed in the Court's decision as the plan would have afforded broad relief to millions of borrowers who are struggling under historic amounts of student loan debt. The Administration is currently reviewing alternative means to achieve the same end, but for now, blanket forgiveness of student loan debt is not available. 

The opinion made clear, however, that the dischargeability of student loan debt in bankruptcy for those who can demonstrate that repayment of the debt would pose an undue hardship remains a viable option.  In fact, by rejecting the blanket or mass cancellation of loans, the decision strengthened the recent Department of Justice guidelines on Student Loan Adversary Proceedings [SLAPs] in bankruptcy, as those are individualized to the facts of each case.  With student loan payments set to resume in October after a three-year forbearance, bankruptcy remains the most comprehensive and powerful way for people in financial distress to obtain relief, and NACBA encourages borrowers who are struggling under their student loan debt to discuss their options with a consumer bankruptcy attorney.    

"The cost of secondary education in the United States is soaring: Americans now owe more than $1.76 trillion in student loan debt—more than credit card debt and automobile loan debt—with average balances per borrower nearly twice as high as they were a generation ago,” says NACBA President Richard Nemeth. “With the economy still recovering from the devastating effects of the COVID pandemic, it has become increasingly difficult for borrowers in financial distress to repay. This not only puts borrowers at risk, it can also affect parents and grandparents who sacrifice their life savings to help.”

Though disappointing, the Supreme Court's ruling has made clear that best way to proceed to address the student loan debt problem is for Congress to act.  NACBA believes the bi-partisan Cornyn/Durbin bill which would restore full dischargeability of student loans for debtors who can demonstrate need is the best option. 

“President Biden's plan would have provided significant assistance and NACBA is disappointed in the Supreme Court's recent decision and hopeful that another basis for providing some relief can be found,” continues Nemeth. “In the meantime, NACBA will continue to work with our legislative partners toward restoring the dischargeability of student loans in bankruptcy and, as always, will continue to diligently advocate for our clients to get the best outcomes available.”


NACBA is the only national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy. Formed in 1992, NACBA now has more than 4,000 members located in all 50 states and Puerto Rico.

From its earliest days, NACBA has devoted enormous energy to protecting and enhancing the rights of consumer bankruptcy debtors by getting involved in legislative efforts to change the Bankruptcy Code. NACBA serves as the voice for debtor attorneys and their clients in the U.S. Congress, the Justice Department, the Judiciary, and other federal agencies. NACBA also works with its members to represent consumer debtor interest in state capitals. NACBA's team of legislative advocates in Washington works with a coalition of allies who often join our efforts. For more information visit

If you are struggling with student loan debt, or any other type of debt, contact Butwinick Law Office today and we can help you determine if bankruptcy is the right option for you.

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About the Author

Jeffrey Butwinick

Practice Areas Jeff specializes in providing legal counsel to small business clients, and assisting clients in their personal and/or business bankruptcy petitions. He also helps people who have been subjected to illegal collection efforts. Current Practice Areas: Personal bankruptcy, small b...


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