Student Loans and Bankruptcy: Can You Discharge Your Debt?

1 February 2026

Let’s be real for a minute—student loans can feel like a life sentence. You graduate, you land your first job (hopefully), and then that monthly payment reminder hits like clockwork. Sometimes, it becomes overwhelming. You might even find yourself wondering, “Can I just file for bankruptcy and wipe this out?”

It’s a fair question. But the answer is—well, it’s complicated. Let’s talk about it.

The Basics: What Is Bankruptcy?

Before we go full steam into student loans, let’s back up a little. Bankruptcy is a legal process. It allows people who are drowning in debt to either erase or repay some of it under court protection.

There are two main types of bankruptcy for individuals:
- Chapter 7: Think of this as a full-on clean slate (with exceptions).
- Chapter 13: More like a repayment plan—stretches your debt over a few years with court supervision.

The goal? Give people a financial reset button. Unfortunately, student loans didn’t get the memo.

Why Student Loans Are Treated Differently

Here’s the kicker—we’ve all heard about people discharging credit card debt, medical bills, even personal loans. But student loans? That’s a different beast.

Since the 1970s, discharging student loans in bankruptcy has been very difficult. Why? Because Congress decided that student loans should be a “protected class” of debt—like child support or tax debts. The logic is that student loans are an investment in your future and shouldn’t be too easy to escape.

So—to wipe out student loans, you have to go beyond just filing bankruptcy. You have to prove something extra.

The “Undue Hardship” Standard

Get ready—this is where it gets tricky.

To discharge student loans in bankruptcy, you need to meet the undue hardship standard. That means showing the court that repaying your student loans would cause extreme financial difficulty—not just that it’s inconvenient or frustrating.

Most courts use what’s called the Brunner Test (named after a 1987 court case). It has three parts:
1. Poverty – You wouldn’t be able to maintain a minimal standard of living if forced to repay the loans.
2. Persistence – Your financial situation isn’t going to improve anytime soon.
3. Good Faith – You’ve made honest efforts to repay your loans.

Let’s break those down.

1. Poverty: You’re Barely Getting By

This doesn’t mean you’re just tight on money—it means you’re living paycheck to paycheck, barely covering food, shelter, and basic needs. Courts look at your income, expenses, and any dependents you support.

If you’ve got luxuries like vacations, cable, or streaming subscriptions? That could work against you.

2. Persistence: Things Aren’t Getting Better

You’ve been stuck in a tough spot for a long time, and there’s no sign of improvement. For example, maybe you have a disability, or work in an industry with little earning potential despite your degree.

Temporary hardship won’t cut it—you have to show long-term doom and gloom.

3. Good Faith: You Tried to Do the Right Thing

This is a big one. The court wants to see that you didn’t just take out loans and ghost your payments. Did you apply for deferment or income-driven repayment? Have you made any payments at all? If so, you can show you tried—and that helps your case.

Filing for Bankruptcy Isn’t Enough — You Need an Adversary Proceeding

Even if you meet all three Brunner Test parts, you still have to take another step: file an adversary proceeding (AP). This is basically a lawsuit within your bankruptcy case that targets your student loans specifically.

In the AP, you lay out your argument for why your loans should be discharged. Be ready for a challenge—your loan servicer or the Department of Education might fight back.

And yes, you may need to go to court. Sounds intense? It is. That’s why many people don’t even try.

Do People Ever Actually Discharge Their Student Loans?

Now, here’s some surprising news—yes, people do get their student loans discharged. It’s rare, but it’s not impossible.

Some studies show that many borrowers who meet the criteria for undue hardship never even ask the court for relief. Why? Most don’t know it’s an option, or they think it’s hopeless.

But persistence pays off. If your situation is genuinely dire, and you can document your hardship, you may have a shot.

What About Federal vs. Private Student Loans?

Good question. Student loans fall into two buckets:
- Federal Loans: These are backed by the U.S. government.
- Private Loans: These come from banks, lenders, or credit unions.

Both types are tough to discharge—but private loans can sometimes be easier to challenge in court, especially if they don’t meet strict definitions of a qualified educational loan.

And here’s a twist—some private loans might not even be legally enforceable, especially if the lender didn’t follow the rules. That’s why it’s worth having an attorney review your loan documents.

The Biden Administration and Loan Discharge Reform

Let’s touch on a recent change. In 2022, the Biden administration rolled out new guidelines aimed at making it easier to discharge federal student loans in bankruptcy.

The Department of Justice and the Department of Education created a standardized process to evaluate undue hardship claims. Borrowers can now fill out an attestation form, and if they meet the criteria, the government may recommend loan discharge without dragging things out in court.

This is still evolving, but it’s a step in the right direction.

Alternatives to Bankruptcy for Student Loan Relief

Okay—so maybe bankruptcy isn’t a perfect solution. But don’t lose hope. There are other paths to lighten the load.

1. Income-Driven Repayment (IDR) Plans

These tie your monthly payment to your income—sometimes as low as $0 per month. After 20-25 years (depending on the plan), any remaining balance may be forgiven.

2. Public Service Loan Forgiveness (PSLF)

If you work full-time for a qualifying nonprofit or government agency and make 120 payments under an IDR plan, your remaining balance can be forgiven.

3. Disability Discharge

If you’re permanently disabled, you might qualify to have your federal loans forgiven without filing for bankruptcy.

4. Borrower Defense to Repayment

If your school misled you or broke certain rules, you may be eligible for loan cancellation.

These programs have their own hoops to jump through—but they’re far less painful (and risky) than bankruptcy court.

Should You Talk to an Attorney?

Look, navigating student loans and bankruptcy is like trying to solve a Rubik’s cube in the dark—possible, but incredibly difficult.

A bankruptcy attorney who specializes in student loans can help you figure out whether you’ve got a case for discharge. It’s better to get advice up front than to fly blind and risk denial.

Many offer free consultations, so it’s worth making the call.

Final Thoughts

Student loans and bankruptcy? It’s not an easy fix—but it’s not a closed door either. If you’re at the end of your rope, there might be a path forward. It won’t be fast, and it won’t be easy, but for some people, it just might be worth it.

Remember—your financial future deserves more than guesswork. Know your options, explore your rights, and don’t be afraid to ask for help. There’s more than one way out of student loan debt—you’ve just got to find the one that fits your situation.