Quick answer

Bankruptcy can eliminate some student loan balances, but only in limited circumstances. Most federal and private student loans survive a regular bankruptcy discharge unless a bankruptcy court finds repayment would cause “undue hardship.” (See 11 U.S.C. §523(a)(8).)

Legal standard and how courts decide

  • Statute: 11 U.S.C. §523(a)(8) generally bars discharge of student loans unless undue hardship is proven (federal statute).
  • Common tests: Many courts follow the Brunner three‑part test (inability to maintain a minimal standard of living if required to repay; this state of affairs is likely to persist; and good‑faith efforts to repay). Other jurisdictions apply a totality‑of‑the‑circumstances test. The standard varies by circuit and is fact‑specific; judges have broad discretion (Brunner v. N.Y. State Higher Educ. Servs. Corp., 831 F.2d 395 (2d Cir. 1987)).
  • Adversary proceeding: To ask for a discharge, a borrower files an adversary proceeding within the bankruptcy case — a separate lawsuit where the court evaluates undue hardship.

Which loans are more (and less) likely to be discharged

  • Federal student loans: Generally non‑dischargeable; discharge is possible but rare and requires a strong undue‑hardship showing. The U.S. Dept. of Education and the CFPB confirm federal loans usually survive bankruptcy absent undue hardship (U.S. Dept. of Education; Consumer Financial Protection Bureau).
  • Private student loans: Still require undue‑hardship proof, but judges sometimes grant relief more often for private loans depending on loan terms and state law.
  • Special discharges: Closed‑school discharges, false‑certification discharges, and borrower defense claims exist outside bankruptcy and can cancel federal loans in qualifying situations; bankruptcy is not the only pathway.

Practical process and what borrowers should prepare

  1. Consult a bankruptcy attorney experienced in student loans. Success rates depend heavily on how well the hardship case is presented. In my practice, careful budgeting schedules and evidence of long‑term inability to work have made the difference.
  2. File bankruptcy (Chapter 7 or 13) and open an adversary proceeding to seek student loan discharge. The adversary complaint asks the court to rule the loans are dischargeable.
  3. Gather documentation: detailed income history, monthly budget and expenses, medical records, employment searches, loan statements, correspondence with servicers, and proof of good‑faith repayment efforts (payment records, enrollment in income‑driven plans, deferments used).
  4. Expect discovery and possibly expert testimony (e.g., vocational experts) on employability and income projections.

Practical examples

  • Brunner‑style case: A borrower with chronic disability and long prognosis showing no realistic chance to repay may meet the undue hardship test.
  • Work‑related example: Borrowers who can show sustained low income, job market barriers, and no reasonable prospect of wage growth have better odds than those with recent high earnings or employable skills.

Options to consider before filing

  • Income‑driven repayment plans, consolidation, public service and other forgiveness programs (for federal loans).
  • Loan rehabilitation or negotiation for private loans.
  • A focused review with a student‑loan counselor or a consumer law attorney.

Common mistakes to avoid

  • Assuming bankruptcy automatically clears student loans — it almost never does without undue hardship.
  • Filing an adversary proceeding incomplete or without supporting evidence.
  • Relying solely on anecdotal success stories; outcomes vary widely by district and judge.

Where to learn more

Bottom line

Student loan discharge in bankruptcy is possible but uncommon. Success requires an adversary proceeding and persuasive evidence of undue hardship. Talk with a qualified bankruptcy attorney to evaluate your situation and collect the documentation courts expect.

Disclaimer

This article is educational only and not legal advice. Consult a bankruptcy attorney or financial counselor for advice tailored to your case.