This is not good timing for Joe Biden. As a Delaware senator, Biden was one of the key proponents of legislation making it more difficult for Americans to reduce their student debts in bankruptcy court. Now, even as the vice president decides whether to jump into the 2016 presidential race, the Obama administration is decrying the bill’s harmful impact and making a high-profile effort to roll back the student-related parts of the 2005 law. A Department of Education report calling for the rollback says the Biden-backed bill has left “private student loan borrowers in financial distress with few options.”
According to the Economist, “Student debt in America now totals $1.2 trillion, up more than threefold” since 2005, when the bankruptcy bill passed. Bankruptcy experts say the legislation -- and other Biden-backed bills that also limited the discharge of student debt -- have contributed to skyrocketing U.S. student debt. While pushing those bills, Biden raised more than $1.9 million in campaign contributions from the financial sector.
Biden’s office did not respond to International Business Times questions about whether he supports the administration’s proposal to roll back the law he supported. His office previously told IBT that the vice president supported the administration’s move to study the issue.
Biden’s record on bankruptcy could emerge as a flashpoint in the 2016 race -- just as it did in 2008. Hillary Clinton’s team “has turned up material on Biden’s ties to Wall Street,” reports Gabriel Sherman in New York Magazine, citing Biden’s work as a senator pushing the 2005 legislation.
Clinton’s campaign did not respond to IBT questions about whether she supports or opposes the Obama administration’s proposal to rescind the student debt provisions of the Biden-backed law. A spokesperson for Democratic presidential candidate Martin O’Malley said the former Maryland governor supports the Obama administration proposal. Vermont Sen. Bernie Sanders voted against the 2005 bankruptcy bill, but his campaign did not respond to a request for comment about whether he supports rolling back the law's student debt provisions.
While Clinton herself voted for one of those Biden-backed bankruptcy bills -- and she, too, has close Wall Street ties -- Biden has a far more extensive record on the bankruptcy issue. He did not just work on the 2005 bill: As a member of the Senate Judiciary Committee, he was intimately involved in most of the major legislation that intentionally made it more difficult for Americans to reduce their student debts in bankruptcy court.