Discharging Student Loans in Bankruptcy

Why the Old Conventional Wisdom Took Hold

The belief that student loans can never be discharged grew out of a combination of statutory changes and a small number of harsh appellate decisions. Over successive amendments, Congress made educational loans presumptively nondischargeable absent undue hardship, and eventually extended that treatment to certain private educational loans as well. Meanwhile, courts applying the Brunner test in its strictest form sometimes denied discharge even to borrowers in genuinely dire circumstances, producing headlines that reinforced the sense of futility. The cost of litigating an adversary proceeding, combined with the perception of near-certain loss, meant few borrowers tried — and the lack of attempts became self-fulfilling proof that it could not be done.

How the Attestation Form Works in Practice

Under the November 17, 2022 guidance (justice.gov), the borrower completes a sworn attestation form disclosing household income, assets, monthly expenses, and circumstances bearing on the ability to repay. Government attorneys compare the disclosed figures against objective benchmarks — for example, comparing expenses against IRS and other standardized allowances and assessing whether the borrower's situation is likely to persist and whether good-faith repayment efforts were made. Where the criteria are satisfied, the government can recommend a full or partial discharge to the court rather than contesting the case. Because the form standardizes the analysis, it reduces the uncertainty and expense that previously deterred borrowers and their counsel. The current form is at justice.gov/d9/2024-05/StudentLoanAttestationFillableForm.pdf.

Reading the ~98% Figure Honestly

studentaid.gov reports that courts granted full or partial discharge in approximately 98% of cases decided under the streamlined process between November 2022 and March 2024. Two cautions are essential. First, the figure is windowed and source-attributed: it describes a defined set of decided cases in a specific period, not a perpetual or guaranteed rate. Second, it reflects self-selection — the borrowers who reach a decision under this process are generally those whose facts fit the undue-hardship criteria and who had counsel willing to bring the case. A borrower whose income comfortably covers loan payments would not expect this result. The correct framing is always the same: no outcome is guaranteed; whether your loans can be discharged depends on your facts and a court's decision.

Partial Discharge and Other Outcomes

Discharge is not all-or-nothing. Courts can grant a partial discharge — eliminating a portion of the loan balance while leaving the rest — or restructure the obligation in light of the borrower's ability to pay. This is why studentaid.gov reports the rate as "full or partial" discharge. For a borrower with some capacity to repay but a balance that is genuinely unmanageable, a partial discharge can be a meaningful result even if a full discharge is not available. An attorney can advise on which outcome your circumstances may support.