Quick Answer: Student loans can be discharged in bankruptcy — and the success rate for borrowers who actually try is now 87%. The problem isn’t the law. It’s that 99.76% of student loan borrowers in bankruptcy never attempt discharge, often because their own attorneys tell them it’s impossible. Three peer-reviewed studies, DOJ data, and court records all confirm the same thing: the “student loans can’t be discharged” narrative is a myth that has cost millions of Americans their financial futures.
Expert Context: I’ve been guiding people through debt crises since 1994, and I ran a credit counseling organization from the inside. For decades, I watched bankruptcy attorneys tell clients not to even bother trying to discharge student loans — and I watched those clients suffer for years with debt they might have been legally freed from. The data in this post didn’t exist when I started. Now it does. And it changes everything.
Part of the Chapter 7 Hub: This post is one piece of my complete Chapter 7 Bankruptcy Guide — everything you need to know about filing, who qualifies, what gets discharged, and what happens to your credit after.
What I’m about to show you is the most important thing you’ll read if you have student loan debt you can’t pay: the “impossible to discharge” narrative was never true, and now we have 15 years of peer-reviewed research proving it.
The Research That Changed Everything
Professor Jason Iuliano, now at the University of Utah’s S.J. Quinney College of Law, has spent 15 years doing what nobody else bothered to do: actually counting how many student loan borrowers attempt bankruptcy discharge and how many succeed.
His three landmark studies tell a devastating story:
Read those numbers again. Even in 2007 — before any reforms — four out of ten borrowers who tried got full or partial discharge. By 2022-2023, the success rate reached 87%.
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The most damning finding from Iuliano’s 2020 study in the Duke Law Journal: “For every 500 student loan debtors who file for bankruptcy, 499 never even try to discharge their educational debt.”
Between 2011 and 2024, more than 3 million student loan borrowers filed for bankruptcy. Only 7,293 — a quarter of one percent — took the additional step of filing an adversary proceeding to request discharge.
The Myth: “It’s virtually impossible to discharge student loans in bankruptcy.”
The Reality: 87% of borrowers who file adversary proceedings succeed. The barrier isn’t legal impossibility — it’s that attorneys and borrowers believe the myth and never try. As Iuliano told the New York Times: “The myth that student loans are never dischargeable in bankruptcy is so pervasive that many attorneys never even raise the possibility with their clients.”
What the DOJ Actually Changed in 2022
On November 17, 2022, the Department of Justice and Department of Education issued new guidance that fundamentally changed how the federal government handles student loan bankruptcy cases. Instead of automatically fighting every discharge request — which it had done for decades — the DOJ created a standardized attestation process.
The DOJ’s three-part test evaluates:
- Present inability to repay — Can you actually pay this loan right now?
- Future persistence — Is your situation likely to continue? (Age, disability, health, employment prospects)
- Good faith — Did you try to repay? You don’t need to have succeeded — just tried.
Certain factors trigger expedited review: being 65 or older, long-term disability, chronic health conditions, extended unemployment, or never completing the program.
Key Terms Defined
Adversary proceeding: A separate lawsuit filed within your bankruptcy case specifically requesting student loan discharge. It doesn’t happen automatically — you have to ask. This is the step 99.76% of borrowers skip.
Attestation form: A 15-page DOJ form where you document your financial situation, employment, health, and repayment history. If your answers meet the DOJ’s criteria, the government stops fighting your discharge and recommends it to the court.
Undue hardship: The legal standard under 11 U.S.C. § 523(a)(8) for discharging student loans. Congress never defined what “undue hardship” means — courts created different tests to interpret it.
The Results Are Staggering
In the first 10 months after the DOJ guidance took effect, 632 adversary proceedings were filed. Of cases where courts entered orders, 99% resulted in full or partial discharge when the DOJ recommended it.
By 2025, 1,693 student loan debtors filed adversary proceedings in a single year — a 92% increase over 2023. The pipeline is growing because word is finally getting out.
Iuliano’s most recent study, published in December 2025 in the American Bankruptcy Law Journal, examined 652 adversary proceedings filed during the first year of the new process:
- 502 cases (86%) resolved through settlements — the government agreed to discharge
- Mean student debt discharged: $85,000
- Median percentage discharged: 100%
- Only 6 cases (1%) were denied discharge
- Average case took 266 days (about 9 months)
Important: The DOJ attestation process covers federal loans held by the Department of Education — Direct Loans and some FFEL loans. It does NOT cover private student loans or commercially held FFEL loans. Private loans follow a different path (covered below).
Who Is Getting Their Loans Discharged?
Iuliano’s data paints a clear picture of who is filing and succeeding. These aren’t wealthy people gaming the system — they’re ordinary Americans who simply cannot pay:
The typical filer earns $3,000/month, spends $3,100/month, owes $77,000 in student loans (median), and has a negative net worth of $94,000. These are people who were already running a monthly deficit before student loan payments. No amount of budgeting advice was going to solve this.
One borrower quoted in the New York Times coverage, Amy Howdyshell, a 43-year-old licensed practical nurse, had $78,000+ in federal student debt dismissed: “Now I have the financial freedom to pursue my dreams of homeownership. It was a scary process but worth the gamble.”
The Attorney Knowledge Gap: The Real Barrier
This is what makes me angriest about this entire situation. The law allows discharge. The success rate is 87%. And millions of people never find out because their own bankruptcy attorneys don’t tell them.
Bankruptcy attorney Josh Cohen, a board member of the National Association of Student Loan Lawyers, has been sounding this alarm for over a decade. His observation cuts to the core of the problem: judges are “asking, even begging, for some of these cases” — they see borrowers who clearly qualify for discharge but can’t act because no adversary proceeding is filed.
Here is one of the most revealing statistics in Iuliano’s original 2012 study: pro se borrowers (those representing themselves without an attorney) had a higher success rate than represented borrowers — 43% versus 38%. People with no legal training who simply filed the paperwork and asked succeeded more often than those who hired lawyers.
What does that tell you? It tells you the legal standard isn’t the problem. The problem is that attorneys self-select cases they think they’ll win, and their assumption about what’s winnable is based on a myth — not data.
“Most attorneys won’t take these cases on, even if you go to an attorney and offer to pay them upfront.”
— Jason Iuliano, University of Utah, quoted in the New York Times (December 27, 2025)
The American Bar Association itself acknowledged the problem in 2021, passing Resolution 512 urging Congress to eliminate the undue hardship requirement entirely. The American Bankruptcy Institute’s Commission on Consumer Bankruptcy went further, stating that “existing bankruptcy law does not effectively address this problem” and recommending private loans be made freely dischargeable and federal loans dischargeable after 7 years.
Private Student Loans: A Different Path
The DOJ attestation process doesn’t cover private student loans. But here’s what most people don’t know: many private student loans may not even be protected from discharge at all.
The CFPB identified in April 2022 several categories of private loans that can be discharged in standard bankruptcy proceedings — without proving undue hardship:
- Loans that exceeded the cost of attendance (especially direct-to-consumer loans)
- Loans for schools not eligible for Title IV federal funding (unaccredited schools, some foreign schools)
- Loans for less-than-half-time students
- Loans to cover bar exam or professional exam fees and living expenses
- Loans to cover medical or dental residency expenses
The Second Circuit confirmed this interpretation in Homaidan v. Sallie Mae (2021), holding that certain private loans — including Tuition Answer Loans from Sallie Mae that exceeded the cost of attendance — are not protected by section 523(a)(8) and can be discharged like any other unsecured debt.
The CFPB went further in Bulletin 2023-01, finding that servicers were illegally collecting on private loans that had already been discharged — returning them to repayment status and continuing to bill borrowers who no longer owed the money.
Critical: If you discharged private student loans in a past bankruptcy and your servicer continued collecting, you may be owed a refund. The CFPB directed servicers to conduct multi-year lookbacks and issue refunds to affected borrowers.
For private loans that do meet the definition of “qualified education loan” under the tax code, you’ll still need to prove undue hardship through an adversary proceeding. But you’re fighting a private lender, not the Department of Justice — and private lenders often settle rather than litigate against borrowers who clearly can’t pay.
How We Got Here: The Legislative History Nobody Tells You
Before 1976, student loans were freely dischargeable in bankruptcy — and the discharge rate was only 0.3% of federally insured loans. Read that again. When student loans could be freely discharged, almost nobody actually did it. The entire legislative framework restricting discharge was built on a myth of widespread abuse that the data never supported.
The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was the most damaging change. It extended the undue hardship requirement to private student loans for the first time. Before 2005, private loans could be discharged like any other consumer debt.
Who lobbied for this? Sallie Mae spent $9 million on lobbying between 1999 and 2005. The industry claimed the change would reduce losses and lower interest rates. The reality, as bankruptcy scholar Michelle J. White documented: after BAPCPA, credit card company losses decreased — but prices charged to customers increased and profits soared.
“Some of the debtors who are most in need of bankruptcy-provided debt relief will be unable to file because they cannot afford to pay the higher costs of bankruptcy, including lawyers’ fees, filing fees, and the other costs of filing.”
— Michelle J. White, Bankruptcy Reform and Credit Cards (2007)
Congress never defined “undue hardship.” The only mentions in the Congressional record came from opponents who called it “vague.” Courts were left to invent their own tests — leading to the rigid Brunner test that became the dominant standard, despite never being the only one.
The Brunner Test vs. Totality of Circumstances
Most federal courts apply the Brunner test, established in Brunner v. New York State Higher Education Services Corp. (1987). It requires you to prove all three prongs:
- You cannot maintain a minimal standard of living if forced to repay
- Your situation is likely to persist for a significant portion of the repayment period
- You made good faith efforts to repay
Over time, lower courts interpreted Brunner to require what Chief Judge Cecelia Morris called a “certainty of hopelessness” standard — essentially requiring borrowers to prove they would never be able to pay. In her landmark 2020 decision, Rosenberg v. NY State Higher Education Services, Judge Morris rejected this interpretation and discharged $221,385 in student loans, applying Brunner “as it was originally intended.”
Some circuits — the 1st and 8th — use the more flexible totality of circumstances test, which weighs all factors holistically rather than requiring rigid prong-by-prong proof. Borrowers in Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Massachusetts, Maine, New Hampshire, and Rhode Island face a more forgiving standard.
But the practical reality post-2022 is that the DOJ attestation process bypasses Brunner entirely for federal loans. Most cases settle without the court ever applying the test. The Brunner debate, while legally important, is becoming less relevant for federal loan borrowers in practice.
What About the Current Administration?
The DOJ attestation guidance was introduced during the Biden administration. As of early 2026, the process remains active under the Trump administration. The attestation form was updated in May 2025, and the DOJ’s Student Loan Guidance page was last updated January 24, 2026.
That said, the Department of Education has been significantly restructured. The GAO reported in March 2026 that Federal Student Aid staff was cut by 46% and the Department stopped reviewing accuracy of servicer records. What this means for the long-term sustainability of the attestation process is uncertain — which is another reason to act sooner rather than later if you qualify.
What You Should Do Now
If you have student loan debt you can’t realistically repay, here is the path forward. And if you’re a parent weighing whether to co-sign loans for a child heading to college, read the math on what college actually costs in 2026 before you sign anything.
- Determine your loan types. Log into studentaid.gov to see your federal loans. Check credit reports for private loans. The discharge path depends entirely on whether your loans are federal, private, or FFEL.
- For federal loans held by the Department of Education: The DOJ attestation process is your best path. You need a bankruptcy attorney who specifically handles student loan adversary proceedings. Not all do. Ask explicitly before you hire anyone.
- For private loans: Check whether your loans fall into a CFPB-identified category that may be dischargeable without proving undue hardship (exceeded cost of attendance, unaccredited school, less-than-half-time enrollment). If they do, they may be discharged like normal unsecured debt in Chapter 7.
- If your bankruptcy attorney says “student loans can’t be discharged”: Get a second opinion. That attorney is wrong. Show them Iuliano’s research. The National Association of Student Loan Lawyers maintains a directory of attorneys who specialize in this work.
- If you’ve already gone through bankruptcy and your private loans were improperly collected afterward: The CFPB has directed servicers to issue refunds. Contact your servicer and reference CFPB Bulletin 2023-01.
- Document everything now. Whether you file tomorrow or next year, start documenting your financial situation: income, expenses, medical records, employment history, prior repayment efforts. The Brunner test and the DOJ attestation both require evidence.
Not sure where you stand? Take the Find Your Path quiz — it evaluates your full financial picture and recommends whether bankruptcy is right for you, consolidation, or another approach makes the most sense for your specific situation.
Key Takeaways
- 87% of borrowers who file adversary proceedings for student loan discharge succeed (Iuliano, 2025)
- 99.76% of student loan borrowers in bankruptcy never even attempt discharge
- The DOJ attestation process (active since 2022, still running in 2026) has a 98-99% success rate for qualifying federal loans
- Many private student loans can be discharged WITHOUT proving undue hardship — the CFPB has identified specific categories
- The biggest barrier isn’t legal — it’s that attorneys believe the myth and don’t advise clients about the option
- BAPCPA 2005 extended non-dischargeability to private loans, but many private loans don’t actually qualify for that protection
- If you were told “student loans can’t be discharged” — get a second opinion from an attorney who specializes in this
The Bottom Line
For decades, a myth has circulated through law offices, financial planning offices, and internet forums: student loans are impossible to discharge in bankruptcy. That myth has cost millions of Americans their financial futures. The data tells a completely different story. Of the small number of borrowers who actually file adversary proceedings, 87% succeed — and under the current DOJ process, that number approaches 99% for qualifying federal loans. If you are carrying student loan debt you realistically cannot repay, the question is not whether discharge is possible. It is. The question is whether you’ll find an attorney willing to file. Now you know what to ask for — and you have the research to back you up.
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Frequently Asked Questions
Is the 87% success rate real?
Yes. It comes from a peer-reviewed study published in the American Bankruptcy Law Journal in December 2025 by Professor Jason Iuliano of the University of Utah. The study examined 652 adversary proceedings filed between October 2022 and November 2023 — the first full year under the DOJ attestation guidance. It was covered by the New York Times and CNBC.
Does this work for private student loans too?
The DOJ attestation process covers federal loans only. But many private loans fall outside the legal protection of section 523(a)(8) and can be discharged like any other unsecured debt — the CFPB has specifically identified these categories. For private loans that do require undue hardship proof, you’re fighting a private lender rather than the government — and many lenders settle rather than litigate.
How much does filing an adversary proceeding cost?
Attorney fees for an adversary proceeding typically range from $3,000 to $10,000 or more, on top of the base bankruptcy filing costs. Some attorneys offer payment plans. Legal aid organizations in many states handle bankruptcy cases for low-income borrowers. The National Consumer Law Center maintains resources for finding help.
What if the DOJ guidance changes under the current administration?
As of early 2026, the attestation process remains active. The form was updated in May 2025, and the DOJ guidance page was last updated January 24, 2026. However, the Department of Education has undergone significant staffing cuts. If you qualify, acting sooner is better than waiting.
My bankruptcy attorney told me not to bother. What should I do?
Get a second opinion from an attorney who specializes in student loan adversary proceedings. The National Association of Student Loan Lawyers (NASLL) is a good starting point. As Iuliano’s research shows, the 0.1% attempt rate is driven largely by attorney reluctance, not legal impossibility. Many bankruptcy generalists simply don’t have experience with student loan adversary proceedings and default to “it can’t be done.”
What happened to the Fresh Start Through Bankruptcy Act?
The bipartisan FRESH START Act, introduced by Senators Durbin and Cornyn in 2021, would have made federal student loans dischargeable after 10 years without proving undue hardship. It did not receive a vote. The Student Loan Bankruptcy Improvement Act of 2025 (H.R. 4444) would change the standard from “undue hardship” to simply “hardship.” Neither has passed as of April 2026.
If your loans have already gone into default, start here: My Student Loans Are in Default. Here’s What to Do Right Now. — the emergency steps to get out before garnishment starts.
Still hearing that student loans can never be wiped out in bankruptcy? That’s a myth — see what actually changed in 2022 and who qualifies now.
Dealing With Debt? Understanding your options is the first step. See how all your debt relief options compare — including ones most sites won’t tell you about. The Find Your Path quiz gives a recommendation based on your actual numbers, and the Scam-O-Meter checks any company’s complaint history before you sign. Federal Reserve research shows bankruptcy filers recover faster than those who don’t file.
