Yesterday, the U.S. House Subcommittee on Commerical Adminsitrative Law passed the Private Student Loan Bankruptcy Fairness Act of 2010 (H.R. 5043).

The Act would allow for privately issued student loans in bankruptcy to be treated the same as other types of private debt. Loans made by governmental agencies or loan programs where “substantially all of the funds arre provided by a non-for-profit entity” would not be dischargeable unless borrowers could show an undue hardship.

The Act would restore language that existed prior to changes to the bankruptcy code in 2005.