If you have been told for years that your student loans can never be discharged, I understand why you believed it, and why it may have left you discouraged. The answer is yes. Federal student loans can be discharged in bankruptcy, and they always could. They are not discharged automatically. You have to ask the court for it, in a specific way, and meet a specific standard. Most of what you have heard is an outdated, shortened version of that answer.
I have filed more federal student loan discharge cases in Colorado than every other attorney in the state combined, and this is the question I am asked more than any other. Here is the full answer, including the parts that are less encouraging, because you deserve the whole picture, told honestly.
What does the Bankruptcy Code actually say about student loans?
The statute says student loans are not discharged unless keeping them would impose an undue hardship on you and your dependents. That is 11 U.S.C. § 523(a)(8). It covers federal loans, loans made or guaranteed by a government unit or a nonprofit, and most private loans that meet the tax code's definition of a qualified education loan.
Congress never defined undue hardship. That single gap is the reason this area of law looks the way it does. Courts had to create a test, and for decades it was applied so strictly that very few borrowers could meet it in practice, even though the law never said discharge was impossible.
What is the Brunner test?
Brunner is the three part test most federal courts use to decide undue hardship. It comes from a 1987 Second Circuit case, Brunner v. New York State Higher Education Services Corp., 831 F.2d 395. You have to show all three parts:
- Present inability. Based on your current income and expenses, you cannot maintain a minimal standard of living for yourself and your dependents if you are forced to repay the loans.
- Persistence. Additional circumstances suggest that situation is likely to continue for a significant part of the repayment period.
- Good faith. You have made good faith efforts to repay the loans.
Nothing about those three questions is unreasonable. The trouble was how courts answered them. Some required something close to permanent disability to satisfy the second part. Some treated any gap in payments as a failure of good faith. A test that sounds like a fair inquiry became, in many courtrooms, a demand for proof that your life would never improve. If you were turned away during those years, that reflected how the test was applied, not a judgment about you.
How does the Tenth Circuit apply Brunner in Colorado?
More flexibly than many circuits did for a long time. Colorado sits in the Tenth Circuit, and in Educational Credit Management Corp. v. Polleys, 356 F.3d 1302 (10th Cir. 2004), the court adopted Brunner but told lower courts to apply it in a way that allows borrowers who genuinely cannot pay to receive a discharge.
Polleys said courts should not require a certainty of hopelessness. It said the future inquiry should be a realistic look at the borrower's circumstances, grounded in specific facts rather than optimism about what might happen someday. It also rejected the idea that a permanent medical disability is a prerequisite. And it framed good faith around whether the borrower is acting honestly and not manufacturing the hardship, rather than around a perfect payment record.
That matters for every borrower in the District of Colorado. The United States Bankruptcy Court here, and the United States Attorney's Office that represents the Department of Education here, both work within that reading of the law.
What changed in November 2022?
The government changed how it responds to these cases. On November 17, 2022, the Department of Justice issued Guidance for Department Attorneys Regarding Student Loan Bankruptcy Litigation, developed with the Department of Education. The legal test stayed the same. The government's approach to it did not.
Under the guidance, the borrower fills out a detailed attestation form describing income, expenses, circumstances and repayment history. The Assistant United States Attorney handling the case evaluates it against a published framework: expenses measured against the IRS Collection Financial Standards, a set of presumptions that a borrower's situation is likely to persist, and a broad view of what counts as good faith. Where the facts fit, government counsel is directed to stipulate to the facts showing undue hardship and recommend that the court grant the discharge, in full or in part.
Before 2022, the government's lawyers generally contested these cases and the borrower had to prove everything at trial. That cost and uncertainty is what kept almost everyone from trying. The guidance did not change the law. It changed the economics.
Is it still in effect? The attestation form was revised in May 2025 to update the IRS expense figures, and the Department of Education's guidance to loan holders tells them they may follow the Department of Justice process, including revised versions of it. I watch this closely, because a change in policy would change how I advise every client with a pending case.
Why was I told it was impossible?
Because for most of the last three decades it was very nearly impossible in practice, and the advice did not change when the government's approach did. If you feel frustrated that no one told you sooner, that is an understandable reaction. Congress tightened the rules repeatedly. Until 1998, federal loans that had been in repayment long enough could be discharged without any hardship showing at all. The Higher Education Amendments of 1998 removed that path. In 2005, Congress extended the same protection to most private loans.
After that, the only path was undue hardship, the government contested nearly every case, and the courts applied Brunner harshly. Bankruptcy attorneys learned to tell clients not to bother. Servicers repeated it. Financial advisors repeated it. The advice was defensible in 2010. It has not been accurate for years.
What is an adversary proceeding, and how does the case move?
An adversary proceeding is a lawsuit filed inside your bankruptcy case, with its own complaint, summons and case number. A student loan dischargeability complaint is one of the matters that has to be brought this way under Federal Rule of Bankruptcy Procedure 7001. Under Rule 4007(b), it can be filed at any time, including after your bankruptcy case has closed, and a closed case can be reopened for this purpose without an additional reopening fee.
- The bankruptcy case. A Chapter 7 or Chapter 13 is filed. For some clients the other debt is the main event. For others the bankruptcy is mostly the vehicle for the student loan case.
- The complaint. I file the adversary complaint against the Department of Education and any other loan holder and serve it as the rules require.
- The attestation. You complete the attestation with my help, and I send it with supporting documents to the Assistant United States Attorney. It is not filed with the court unless the court or counsel directs it.
- The evaluation. Government counsel reviews it with the Department of Education and decides whether to recommend a full discharge, a partial discharge, or neither.
- The resolution. If there is agreement, the parties submit a stipulation and a proposed judgment to the bankruptcy judge. If there is not, the case can proceed toward trial like any other lawsuit.
Who tends to be a strong candidate?
Strong candidates are usually not destitute. They are usually people for whom repayment is no longer a realistic expectation, often after many years of trying. The guidance presumes that an inability to pay will persist when certain facts are present, and those facts track the clients I see most.
| Fact | Why it matters |
|---|---|
| Loans in repayment status for ten years or more | One of the guidance's presumptions that the hardship will persist. Time in school does not count toward the ten years. |
| Age 65 or older | A presumption of future inability under the guidance. |
| A disability or chronic condition that limits income | A presumption of future inability. The guidance does not require a formal medical opinion. |
| Unemployed for at least five of the last ten years | A presumption of future inability. |
| Did not complete the degree the loans paid for | A presumption of future inability. |
| Household income that does not cover expenses measured against IRS standards | Goes to the first Brunner question, present inability. |
| A history of engaging with the loans | Payments, deferments, forbearances, consolidation, or income driven repayment all count toward good faith. |
Presumptions can be rebutted, and no single fact decides a case. A borrower with none of these can still qualify, and a borrower with two of them can still fall short if current income comfortably covers the payment. Every case turns on its facts.
Can you get a partial discharge?
Yes. If your income exceeds your allowable expenses by something, but not by enough to make the full monthly payment under a standard repayment plan, the guidance tells government counsel to consider a partial discharge. In practice that can mean discharging a portion of the balance and leaving a remainder you can realistically pay.
A partial result can still matter a great deal. For a borrower carrying a balance that has grown for fifteen years, reducing it to something that can actually be paid off can be the difference between a debt that ends and a debt that continues into retirement.
What does it cost in time?
Less of your time than most people expect, and more calendar time than a plain bankruptcy. Your part is front loaded: downloading your loan data, gathering income and expense records, and working through the attestation with me. After that, most of the work falls to my office and to government counsel.
Under Federal Rule of Bankruptcy Procedure 7012, the United States has 35 days after the summons issues to respond to the complaint, and government counsel often needs more time than that to complete its review. Extensions while the attestation is evaluated are ordinary, and they are not a reason to worry. In my District of Colorado cases, the adversary proceeding typically takes nine to twelve months from filing the complaint to a stipulated judgment.
How are private student loans different?
Private loans are a different analysis. The Department of Justice guidance does not bind private lenders, so there is no attestation process on the other side. But not every private loan is protected by § 523(a)(8) in the first place.
In McDaniel v. Navient Solutions, 973 F.3d 1083 (10th Cir. 2020), a case that came out of Colorado, the Tenth Circuit held that the statute's language about funds received as an educational benefit does not cover private loans generally. A private loan that is not a qualified education loan, for example, because it exceeded the cost of attendance or paid for a school that was not eligible, may be dischargeable without any undue hardship showing. Whether yours is requires reading the loan documents.
What should you gather before a Strategy Session?
Start with your federal loan record. It is the single most useful document in this entire process, and you can get it yourself in a few minutes.
- Log in to studentaid.gov with your FSA ID, go to your dashboard, open the My Aid section and choose Download My Aid Data. Save the file as the plain text file it downloads as. Do not convert it to a PDF.
- Your two most recent federal tax returns.
- Recent pay stubs or other proof of income for everyone in your household.
- A realistic monthly budget, including medical costs, childcare and transportation.
- Anything you have from your servicers about deferments, forbearances, consolidation, or income driven repayment applications.
- The loan documents for any private loans.
The downloaded file comes from the National Student Loan Data System, and it shows loan by loan when each was disbursed and what status it was in over time. That history is what the ten year question and the good faith question turn on, and it is regularly different from what the borrower remembers.
If you want the detail on the form itself, I walk through each section in the student loan attestation, explained.
The next step
If you have been paying on a balance that keeps growing and you were told years ago that bankruptcy was off the table, you deserve to know whether that is still true for you. In a Strategy Session, I read your actual loan data with you and tell you, honestly and without judgment, whether I think your case is strong, marginal, or not there yet. You can read more about my student loan discharge practice and how I work, or get in touch whenever you are ready. I would be glad to hear from you.
