Federal Law Makes Student Loan Discharge in Bankruptcy Difficult, Requires 'Undue Hardship' Proof
Federal law makes it challenging to discharge student loans in bankruptcy, requiring borrowers to prove 'undue hardship' in a separate adversary proceeding. Under 11 U.S.C. 523(a)(8), most government-funded or guaranteed student loans are excepted from discharge unless repayment would impose an undue hardship on the borrower and their dependents. This means a standard Chapter 7 or Chapter 13 discharge does not automatically cover student loans. The Justice Department's 2022 guidance, still posted in November 2026, uses the 'Brunner test' as the most common framework, requiring proof that the borrower cannot maintain a minimal standard of living, their financial situation is likely to persist, and they made good faith efforts to repay.
