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The Struggles of Discharging Student Loans in Bankruptcy


    Student loan debt in the United States has reached unprecedented levels, surpassing $1.7 trillion. As the cost of higher education continues to climb, many borrowers find themselves struggling to make their monthly payments, let alone repay the principal balance. One potential option for those drowning in student debt is bankruptcy. However, many are surprised to learn that discharging student loans in bankruptcy is notoriously difficult. This article examines the reasons why it is so hard to discharge student loans in bankruptcy and the challenges borrowers face when attempting to do so.

    Understanding Student Loans and Bankruptcy:

    Bankruptcy is a legal process designed to provide individuals and businesses with a fresh start by discharging their debts. When a person files for bankruptcy, the court reviews their financial situation to determine which debts can be discharged, or forgiven. However, student loans are not treated like other types of unsecured debt, such as credit card debt or personal loans. They are subject to specific rules and exceptions that make them nearly impossible to discharge.

    The Bankruptcy Code and Student Loans:

    The Bankruptcy Code, the federal law governing bankruptcy proceedings, specifically addresses student loans in Section 523(a)(8). This provision states that student loans can only be discharged if the borrower can prove that repayment would cause an “undue hardship” on them and their dependents. This standard is incredibly high and difficult to meet, as borrowers are required to demonstrate that they have made a good-faith effort to repay their loans but are still unable to do so.

    Factors Considered in Undue Hardship:

    Courts consider several factors when determining whether a borrower has met the undue hardship standard, including:

    • Income and Expenses: The borrower’s income, expenses, and overall financial situation are crucial factors in determining undue hardship. The court will assess whether the borrower can afford to repay their student loans without sacrificing their basic needs, such as food, housing, and clothing.
    • Duration of Repayment: The length of time the borrower has been repaying their student loans is also considered. Courts generally look for a prolonged history of repayment efforts before finding undue hardship.
    • Health and Disability: The borrower’s health and any disabilities they may have can impact their ability to repay their student loans. Medical expenses and reduced earning capacity due to health issues can be factors in determining undue hardship.

    The Challenges of Proving Undue Hardship:

    Meeting the undue hardship standard is a daunting task for borrowers. They must provide extensive documentation and evidence to support their case, including financial statements, tax returns, and medical records. Additionally, they may need to testify in court and be prepared to answer questions about their financial situation. The burden of proof lies solely on the borrower, making it an uphill battle to obtain a discharge of their student loans.


    Discharging student loans in bankruptcy is an extremely difficult and challenging process. The high standard of undue hardship set forth by the Bankruptcy Code makes it nearly impossible for borrowers to successfully eliminate their student debt. As a result, many borrowers are left with overwhelming debt and limited options for relief. Addressing the unique challenges associated with student loans in bankruptcy is crucial, as millions of Americans struggle to manage this growing financial burden.