New Law May Affect Student Debtors

House and Senate conferees will meet later this week to try to iron out differences between two bills that affect students who go bankrupt to avoid paying back their student loans.

The Senate bill maintains the provisions of the Bankruptcy Code Revision Act of 1977, which prevents students from avoiding their debts by declaring bankruptcy within five years of leaving school.

The House version, however, allows student debtors to write off loan obligations by declaring bankruptcy.

R. Jerrold Gibson '51, director of the office of fiscal services, said yesterday the provisions on student loan defaults would probably have little impact on Harvard loan defaulters, adding that he cannot recall any cases of former Harvard students declaring bankruptcy to escape debt since the new law took effect last year.

A spokesman for Sen. Dennis DeConcini (D-Ariz.), the sponsor of the Senate bill, said yesterday, "We're doing everything we can to get this bill passed this year."

He added that it is "quite conceivable that a compromise will not be reached before the present Congress adjourns, probably sometime in the middle of October."

If the committee writes a compromise bill, the proposal will return to both houses for approval before being submitted to President Carter for formal approval.

Student bankruptcies are a more serious problem in southern states such as Texas where bankruptcy requirements are less strict, Gibson said.

He said he favors the Senate clause because "it will keep people from even trying to declare bankruptcy to default on their loans."