Can you get rid of student loans by filing for bankruptcy?

Summary

Sometimes, but filing is not enough. You have to bring a separate lawsuit inside the bankruptcy case, called an adversary proceeding, and prove that repaying would impose an undue hardship on you and your dependents, a rule that covers private loans counting as qualified education loans as well as federal ones. For federal loans, Justice Department attorneys use a standard attestation form to decide whether to agree that the test is met, but the bankruptcy judge makes the final call.

Why student loans survive a bankruptcy

Section 523(a)(8) of the Bankruptcy Code keeps three kinds of education debt from being discharged unless keeping them would impose an undue hardship on the debtor and the debtor's dependents. The first is loans made, insured, or guaranteed by a government unit, or made under a program funded by a government unit or nonprofit institution. The second is an obligation to repay an educational benefit, scholarship, or stipend. The third catches any other educational loan that is a qualified education loan under section 221(d)(1) of the Internal Revenue Code, which is why many private student loans get the same treatment as federal ones.

What the judge looks at

There is no single undue hardship test. According to StudentAid.gov, courts tend to ask whether repayment would leave you unable to keep a minimal standard of living, whether that hardship is likely to last for a significant part of the repayment period, and whether you made good faith efforts to repay before filing. Your creditors can appear and oppose the request.

Winning does not always mean the debt disappears. The court may discharge the loan in full, discharge part of it, or leave it in place on new terms such as a lower interest rate.

The Justice Department's attestation process

Since November 2022, federal student loan cases have followed guidance that tells government attorneys to stipulate to the facts and recommend a discharge when three conditions are met. The borrower presently cannot repay, that inability is likely to last, and the borrower has acted in good faith in trying to repay. The borrower fills out an attestation covering income, expenses, future prospects, past repayment, and assets, and sends it to the assistant U.S. attorney on the case. It is not filed with the court. The version posted on the Justice Department's site is dated May 2025, and its expense figures come from the IRS Collection Financial Standards, which are updated each year.

Present inability is arithmetic. The attorney applies the IRS standards to find your allowable expenses, and if they equal or exceed your income, that condition is met. For the future, the guidance presumes your situation will not improve if any of these apply:

you are 65 or older
a disability or chronic injury limits your earning potential
you have been unemployed for at least five of the past ten years
you did not finish the degree the loan paid for
the loan has been in repayment, not counting school, for at least ten years

Those presumptions can be rebutted. Good faith can be shown by having made a payment, applied for a deferment or forbearance other than in-school or grace, applied for an income-driven plan or a consolidation loan, or answered a servicer or collector. Not having enrolled in an income-driven plan does not by itself count against you, and neither does the automatic COVID forbearance from March 2020 to December 2022. Where a full discharge is not supported, the department says it will consider backing a partial one.

The court still decides

Agreement from the government does not end the case. The guidance says the bankruptcy court must make its own undue hardship finding even if no creditor objects, and the borrower keeps the burden of proof on every element.

Sources

Written by Kaz (pen name). Figures are copied from the sources' published pages on the dates shown. We have not used these products. Corrections: contact form.