Can You Discharge Student Loan Debt in Bankruptcy? What Borrowers Need to Know in 2026

For decades, the conventional wisdom was simple and discouraging: student loan debt cannot be discharged in bankruptcy. That was never entirely true, but the legal barriers were so high that the myth became reality for most borrowers. Today, the landscape has changed dramatically—and if you are struggling with student loan debt, you may have more options than you realize.

The Old Reality: The Brunner Test

Unlike credit card debt, medical bills, or personal loans, student loans are not automatically discharged when you file for Chapter 7 or Chapter 13 bankruptcy. To discharge student loan debt, you must file a separate lawsuit within your bankruptcy case—called an adversary proceeding—and prove that repaying the loans would cause you “undue hardship.”

Most courts apply what is known as the Brunner test, named after the 1987 case Brunner v. New York State Higher Education Services Corp. Under this test, you must prove three things:

1. You cannot maintain a minimal standard of living if forced to repay your student loans based on your current income and expenses.
2. Your financial hardship will persist for a significant portion of the repayment period due to circumstances beyond your control.
3. You have made good faith efforts to repay the loans before filing for bankruptcy.

Historically, courts interpreted this test so strictly that fewer than 0.01% of student loan borrowers successfully discharged their debt. Many bankruptcy attorneys did not even bother advising clients to try.

The Game-Changer: DOJ Guidance (November 2022)

In November 2022, the Department of Justice and the Department of Education announced a fundamental shift in how the federal government handles student loan discharge in bankruptcy. Rather than fighting every discharge request, the government issued standardized guidance instructing DOJ attorneys to evaluate each case using an attestation process—and to recommend discharge when the borrower meets the criteria.

This was a sea change. Under the new process, borrowers complete a detailed attestation form that examines their income, expenses, health conditions, employment prospects, and repayment history. If the information satisfies the undue hardship analysis, DOJ attorneys are directed to stipulate to the facts and recommend discharge rather than oppose it.

The results speak for themselves. According to a CNBC analysis, the success rate for borrowers seeking student loan discharge in bankruptcy has jumped to 87%. And when the government recommends discharge, 98% of cases result in full or partial relief. That is a complete reversal from the era when the government fought virtually every case.

The Numbers Tell the Story

The data since the DOJ guidance took effect in November 2022 has been remarkable. In the first 23 months, 2,514 new student loan adversary proceedings were filed across the country — a 330% increase over pre-guidance filing rates, when the national average hovered around 480 per year. A third of those new filings came from borrowers who had already been through bankruptcy but never attempted to discharge their student loans the first time around.

The success rates are even more striking. When the DOJ reviews the attestation and recommends discharge, courts have agreed 98% of the time, granting full or partial relief. In the earliest decided cases, that approval rate was 99%. A recent empirical study published in the Emory Bankruptcy Developments Journal confirmed these outcomes and noted that the new process is working as intended.

Yet there is a significant gap between those numbers and reality. Researchers have found that fewer than 1% of bankruptcy filers with student loan debt actually seek discharge. Between 2011 and 2019, only one in a thousand borrowers even tried. The new guidance has transformed the odds for those who file, but most people still do not know the option exists. In May 2024, Senators Warren and Whitehouse wrote to the U.S. Trustee Program urging greater outreach to borrowers about the attestation process.

What This Means in the Third Circuit (PA, NJ, and DE)

The Third Circuit — which covers Pennsylvania, New Jersey, and Delaware — applies the Brunner test for undue hardship, the same standard used by most federal circuits. Under the DOJ attestation process, the practical impact of Brunner has been significantly softened. When the government reviews your attestation and agrees that undue hardship exists, it stipulates to discharge rather than opposing your case in court. That means borrowers in our region benefit from the same streamlined process and the same high success rates seen nationally. The key difference from the old days is that you are no longer fighting an uphill battle against government attorneys — the DOJ is now evaluating your case fairly and, in most instances, agreeing to relief.

What This Means for You Right Now

Despite these favorable changes, the vast majority of struggling borrowers still do not take advantage of the process. Between 2011 and 2024, over 3 million student loan borrowers filed for bankruptcy, but only about 7,300 of them took the additional step of requesting a student loan discharge through an adversary proceeding. That means most borrowers either did not know the option existed or assumed it was futile.

If you are currently overwhelmed by student loan debt, here is what you should know:

• The process requires a separate legal filing. Simply filing for bankruptcy does not discharge your student loans. You need an attorney experienced in adversary proceedings to file the additional action and guide you through the attestation process.
• Federal loans are covered. The DOJ guidance applies specifically to federal student loans held by the Department of Education. Private student loans involve a different analysis but may also be dischargeable depending on your circumstances.
• The attestation form is detailed. The form was updated in May 2025 to include more specific expense categories aligned with IRS standards and presumptions for future hardship—such as approaching retirement age or chronic health conditions. Completing it accurately and thoroughly is critical to your success.
• Timing matters. While this guidance remains in effect, there is no guarantee it will continue indefinitely. If you qualify, acting sooner rather than later is advisable.

Is This Guidance Still in Effect Under the Current Administration?

Yes. As of early 2026, the DOJ’s student loan discharge guidance remains in place. The current administration has not rescinded the policy, and the Department of Education has indicated it has no current plans to change the approach. However, policy guidance can change without notice, which is another reason to consult with a bankruptcy attorney promptly if you believe you may qualify.

How Siddons Law Firm Can Help

At Siddons Law Firm, we help clients across Pennsylvania, New Jersey, Maryland, and New York navigate the bankruptcy process—including the adversary proceedings required for student loan discharge. We understand the attestation process, we know how courts in our region evaluate undue hardship, and we will fight to get your student loan debt discharged when the facts support it.

If you are drowning in student loan debt and wondering whether bankruptcy could give you a fresh start, contact us today for a free consultation. Call (610) 255-7500 or visit our office at 230 N. Monroe St., Media, PA 19063.

The law is finally catching up with reality. You deserve to know your options.