Students might just have a lot more to thank Al Franken for than the years of laughs on Saturday Night Live. Senator Franken, along with fellow Democratic Senators Richard Durbin of Illinois, and Sheldon Whitehouse of Rhode Island, have reportedly introduced a bill that will make it far more possible for borrowers to discharge private student loans in bankruptcy, which have been generally shielded from bankruptcy discharge since 2005....

Thanks to a provision the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act signed into law by then President George W. Bush, the current law only allows the discharge of private student loans in bankruptcy after a showing of "undue hardship," the same requirement that is made for federal or non-profit backed student loans. Undue hardship requires a separate showing to a bankruptcy judge proving, in essence, that the borrower would never be able to pay off the loan. This is an extremely difficult legal standard to meet.

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The protected status currently allocated to private student loans in bankruptcy wasn't always the case. Until a change in bankruptcy laws five years ago, private student loans, like credit cards, car loans, and other privately issued debts, were dischargeable in bankruptcy.

But in 2005, as a bankruptcy reform bill -- eventually signed into law by President George W. Bush as the Bankruptcy Abuse Prevention and Consumer Protection Act (S. 256) -- was taking shape, a provision was added to recategorize private student loans as education loans, granting private student loan lenders the same protections against debt write-offs in bankruptcy as the federal government, which issues federal student loans that are subsidized by taxpayers.