Can Student Loans Be Discharged in Bankruptcy? — Chapter 7 & 13 | Merna Law
STUDENT LOANS AND BANKRUPTCY
Quick Answer
Can student loans be discharged in bankruptcy? Rarely — they are presumed non-dischargeable under federal law. The only way to eliminate them is to prove “undue hardship” — a demanding legal standard that requires filing a separate lawsuit inside your bankruptcy case. It is rare, but not impossible, and recent federal guidance has made it somewhat more attainable for borrowers in genuinely hopeless situations. Free consultation: 1-800-662-8813.
By John G. Merna, Esq. | Last Reviewed: July 2026 | The Merna Law Group, P.C.
Can student loans be discharged in bankruptcy? Rarely — but if you are drowning in student loan debt, it is not always impossible. You have likely already heard the discouraging rule of thumb: “student loans can’t be discharged.” That rule of thumb is mostly true, but it is not the whole story. There is a narrow legal path — the undue hardship discharge — and there are real ways bankruptcy can improve your overall financial position even when your student loans survive the case.
Can Student Loans Be Discharged in Bankruptcy?
Under 11 U.S.C. § 523(a)(8), both federal student loans and most private “qualified education loans” are excepted from discharge in Chapter 7 and Chapter 13 unless the debtor proves that repaying them would impose an undue hardship on the debtor and the debtor’s dependents. This covers Direct Loans, FFEL loans, Parent PLUS loans, and the large majority of private student loans made for attendance at an accredited institution.
What Is the Undue Hardship Exception?
The Fourth Circuit — which governs bankruptcy cases filed in the Eastern District of Virginia — applies the three-part Brunner test to decide whether a borrower qualifies for an undue hardship discharge, formally adopted for Chapter 7 cases in Educational Credit Management Corp. v. Frushour (In re Frushour), 433 F.3d 393, 399 (4th Cir. 2005). To meet this standard, a debtor generally must show all three of the following:
— Poverty: based on current income and expenses, you cannot maintain a minimal standard of living for yourself and your dependents if forced to repay the loans.
— Persistence: additional circumstances indicate this situation is likely to persist for a significant portion of the remaining repayment period.
— Good faith: you have made good-faith efforts to repay the loans, including pursuing income-driven repayment where available.
How Does the Undue Hardship Process Work?
A student loan is never automatically discharged just because you file bankruptcy. To seek an undue hardship discharge, your attorney must file a separate lawsuit within your bankruptcy case — called an adversary proceeding — naming your loan holder or servicer as the defendant. This involves formal pleadings, discovery, and often a trial before the bankruptcy judge.
PROVE UNDUE HARDSHIP
The Brunner test asks whether you can maintain a minimal standard of living, whether that is likely to continue, and whether you have made good-faith efforts to repay.
FILE AN ADVERSARY PROCEEDING
Discharge requires a separate lawsuit inside your bankruptcy case against your loan holder — not a box you check on your regular petition.
STILL BENEFIT EVEN WITHOUT DISCHARGE
Wiping out credit cards and medical bills through Chapter 7 or Chapter 13 frees up income to keep up with student loans going forward.
Struggling With Student Loans and Other Debt?
Talk to a bankruptcy attorney about your full financial picture — free, by phone, no office visit required.
Recent Guidance Has Made This More Realistic for Federal Loans
In November 2022, the Department of Justice, together with the Department of Education, issued guidance directing government attorneys to more consistently identify and agree to hardship discharges for federal loan borrowers who are genuinely unable to repay — for example, borrowers who are elderly, permanently disabled, or facing a long-term inability to earn income. This guidance did not change the underlying law, but it has made settled or uncontested hardship discharges more common in appropriate cases than they were a decade ago.
What About Private Student Loans?
Private student loans are covered separately under 11 U.S.C. § 523(a)(8)(B), which applies the same non-dischargeable treatment to any “qualified education loan” as defined by the Internal Revenue Code. Courts apply the same undue hardship analysis to private loans as to federal loans, though private lenders — unlike the Department of Education — are not subject to the 2022 settlement guidance.
If You Don’t Qualify for Discharge, Bankruptcy Can Still Help
Even when a student loan itself cannot be discharged, filing Chapter 7 or Chapter 13 can still meaningfully improve your ability to handle it. Chapter 7 eliminates credit card debt, medical bills, and other unsecured debt, freeing up monthly income to put toward student loans. Chapter 13 can restructure your budget over a three-to-five-year plan, and the automatic stay halts wage garnishment and federal offset of tax refunds on defaulted federal loans for the life of the case. A fresh start on other debt often qualifies borrowers for income-driven repayment plans they could not previously afford to maintain. Learn how the whole process works remotely on our file bankruptcy without leaving home page.
Student Loans and Bankruptcy — FAQ
Is it worth filing bankruptcy if I can’t discharge my student loans?
Often, yes. Eliminating credit card debt, medical bills, and collection accounts through Chapter 7 or Chapter 13 can free up the income you need to keep up with student loan payments going forward, and the automatic stay stops garnishment during your case.
What is an adversary proceeding?
It is a separate lawsuit filed within your bankruptcy case. To ask the court to discharge a student loan on undue hardship grounds, your attorney must file a formal complaint against your loan holder, and the case proceeds much like a standard civil lawsuit, with discovery and often a trial.
Do I need a lawyer to seek an undue hardship discharge?
You are not required to have one, but given the complexity of the Brunner standard and the adversary proceeding process, most debtors who attempt this without an attorney are unsuccessful. An experienced bankruptcy attorney can evaluate whether your facts realistically support a hardship claim before you invest in litigation.
Talk to a Virginia Bankruptcy Attorney
Handling student loans alongside other debt is part of doing bankruptcy right. Merna Law handles every step by phone and Zoom, statewide, and we will tell you honestly whether an undue hardship claim is realistic for your situation. Explore our Chapter 7 and Chapter 13 guides, or see what else Virginia’s exemptions protect on our Virginia bankruptcy exemptions page.
Worried about the cost of filing? Ask about our bankruptcy payment plans — affordable filing with low money down.
