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HB 6489

AN ACT REQUIRING PUBLIC INSTITUTIONS OF HIGHER EDUCATION TO REPAY STUDENT LOANS FOR A GRADUATE WHO IS GRANTED BANKRUPTCY PROTECTION.

2025 Regular Session Introduced by Craig Fishbein and 1 co-sponsor

Connecticut public universities must repay student loans discharged through bankruptcy for their graduates, shifting debt responsibility from borrowers to institutions.

REF. TO JOINT COMM. ON Higher Education and Employment Advancement
#bankruptcy #institutionsofhighereducation #studentloans
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Bill Summary · HB 6489

Legislative bill overview

HB 6489 would require Connecticut's public colleges and universities to repay student loans for graduates who receive bankruptcy protection. The bill essentially makes public higher education institutions financially responsible for their graduates' federal or private student debt when those graduates successfully discharge that debt through bankruptcy proceedings.

Why is this important

This proposal directly addresses the growing student debt crisis by shifting financial responsibility from individual borrowers to educational institutions. It creates a potential incentive structure for universities to control costs and improve graduate employment outcomes, while simultaneously protecting bankruptcy filers from unmanageable educational debt—though the fiscal impact on public universities could be substantial.

Potential points of contention

  • Institutional cost burden: Public universities would face significant unpredictable financial liabilities, potentially requiring tuition increases or budget reductions in other areas to cover loan repayments for students who default
  • Moral hazard concerns: Critics may argue the policy incentivizes irresponsible borrowing or removes accountability, since graduates know institutions will cover bankruptcy-discharged loans
  • Scope and fairness questions: The bill raises equity issues—why should institutions repay loans only for bankruptcy cases versus other forms of default, and how does this affect non-traditional students or those who attended private institutions
  • Bankruptcy law conflicts: Potential complications with federal bankruptcy law, which typically discharges educational debt only in cases of "undue hardship"—the interaction between state law and federal proceedings is unclear

Compiled from official sources — confirm details with the bill’s official record.

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