Quick summary

  • Discharge is possible but rare. Federal loans are especially difficult to discharge; courts often apply an “undue hardship” standard. (See U.S. Courts and Federal Student Aid.)

How does the process work?

  1. File bankruptcy (usually Chapter 7 or Chapter 13).
  2. Start an adversary proceeding: a separate lawsuit inside the bankruptcy case where you ask the judge to discharge student loans.
  3. Prove undue hardship with documents: income, expenses, medical records, job search records, and repayment history.
  4. Judge applies the local court standard (many courts use the Brunner test) and rules for full discharge, partial discharge, or denial.

Key sources: U.S. Courts: https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics; Federal Student Aid: https://studentaid.gov/manage-loans/repayment/discharge-in-bankruptcy; CFPB summary: https://www.consumerfinance.gov/ask-cfpb/can-i-discharge-my-student-loans-in-bankruptcy-en-134/.

What is the “undue hardship” test?

Many courts use the Brunner test, which asks whether the borrower can:

  • Maintain a minimal standard of living if forced to repay;
  • Show that difficult financial circumstances will persist for a significant portion of the repayment period;
  • Demonstrate good faith efforts to repay (attempts at repayment, loan modifications, or income-driven plans).

Standards vary by jurisdiction; some courts use a multi-factor balancing test rather than strict Brunner elements. For a deeper legal overview, see FinHelp’s guidance on undue hardship standards.

Internal reading: “Bankruptcy and Student Loan Undue Hardship Standards” and “Bankruptcy and Student Loans: Current Standards for Discharge”.

Do private and federal loans differ?

  • Federal student loans: courts and the Department of Education treat federal loans as difficult to discharge; the adversary proceeding is usually required.
  • Private student loans: outcomes can vary. Some private loans are discharged more often than federal loans, but many courts still require proof of undue hardship or apply standard insolvency analysis.

Federal Student Aid and the CFPB explain these differences and the procedural steps for federal loans.

Realistic chances — what to expect

  • Reality: discharge is uncommon but not impossible. Successful cases usually involve long-term disability, severe medical costs, long-term unemployment, or other persistent conditions that make repayment impossible.
  • No guaranteed timeline: adversary proceedings add weeks to months to a bankruptcy case; complex cases may take longer.

Anecdotal experience: borrowers with well-documented, long-term inability to work (medical records, SSDI applications, lengthy unemployment) have the best chance of convincing a judge.

How to prepare (professional checklist)

  • Talk to a bankruptcy attorney experienced with student-loan adversary proceedings.
  • Gather documentation: tax returns, paystubs, bank statements, medical records, job-search logs, and proof of attempts to modify or enroll in income-driven plans.
  • Try alternatives first: income-driven repayment, public service loan forgiveness (PSLF), closed-school discharge, or private loan refinancing if appropriate.
  • Expect to argue both current inability to repay and likelihood that circumstances won’t improve.

Common mistakes to avoid

  • Assuming bankruptcy automatically clears student loans.
  • Filing an adversary without strong documentation or legal strategy.
  • Ignoring less-costly alternatives like income-driven plans or rehabilitation for defaulted loans.

Outcomes and next steps

  • Possible outcomes: full discharge, partial discharge, dismissal of the adversary, or settlement with the lender.
  • If denied, borrowers can appeal, seek loan rehabilitation, or pursue repayment plans.

Professional disclaimer

This article is educational and does not constitute legal advice. Bankruptcy law is fact-specific and changes over time; consult a qualified bankruptcy attorney for guidance on your situation.

Authoritative sources

(Updated guidance current through 2025.)