Student Loan Discharge in Bankruptcy

What changed in 2022, and why almost nobody has used it.

You have probably been told student loans can never be discharged in bankruptcy. That has never been the law, and since November 2022 it has not even been close to true.

Two numbers tell the story. Of borrowers who have actually challenged their federal student loans in bankruptcy since the 2022 reform, roughly 87% have succeeded. Of borrowers in bankruptcy who could bring that challenge, about 1.5% do.

Almost everyone who tries, wins. Almost nobody tries.

Those figures come from Jason Iuliano, Student Loan Bankruptcy After the 2022 Reforms, 99 Am. Bankr. L.J. 415 (2025).

The reason is that the process is unfamiliar, it requires filing a separate lawsuit inside your bankruptcy, and most people — including many bankruptcy lawyers — still believe the old story.

And the pressure is back on. The Department of Education resumed collection on defaulted federal loans in May 2025: wage garnishment of up to 15% of disposable pay, interception of tax refunds and Social Security benefits, and loss of eligibility for further federal aid.

(813) 231-2088. The consultation is free.

Jump to a section

1. What the law actually says
2. What changed in 2022
3. The three questions, and how they are now answered
4. Federal loans: what actually happens
5. Private loans: the audit almost nobody runs
6. Chapter 13 and student loans
7. Doing this without a lawyer
8. Experience with these cases

Part 1: What the law actually says

Short answer: student loans are dischargeable. They just require an extra step.

The Bankruptcy Code does not make student loans immortal. It says they are excepted from discharge unless excepting them “would impose an undue hardship on the debtor and the debtor’s dependents.”

Undue hardship is a real standard with a real path to meeting it. What makes student loans different from credit cards is procedural: the exception is not automatic in your favor, so you have to ask. That means filing an adversary proceeding — a separate lawsuit inside your bankruptcy case — and asking the judge to determine that the debt is dischargeable.

Florida courts evaluate undue hardship using the three-part test from Brunner, which the Eleventh Circuit adopted in 2003: whether you can maintain a minimal standard of living if forced to repay, whether that situation is likely to persist for a significant portion of the repayment period, and whether you have made good faith efforts to repay.

You must prove all three, by a preponderance of the evidence, and failing any one of them ends it. The Eleventh Circuit has not softened that. It has called the requirements demanding, and described the second prong as asking for something closer to a certainty of hopelessness than a present inability to pay.

One Eleventh Circuit holding is worth knowing if you are ill. A debtor’s own detailed, credible testimony about physical and emotional ailments can satisfy the “additional circumstances” prong. The court does not require independent medical evidence to corroborate it. For someone who cannot afford an expert report, that matters a great deal.

For decades this test was applied so strictly that lawyers stopped bringing the cases, and the folklore hardened into “you can’t discharge student loans.”

The test did not change in 2022, and in a contested case it is still exactly what you face. What changed is that for federal loans, you are usually no longer contesting it.

The law behind this: 11 U.S.C. § 523(a)(8) (student loans excepted from discharge unless excepting them would impose an undue hardship on the debtor and the debtor’s dependents); Fed. R. Bankr. P. 7001(6) (dischargeability determinations proceed as adversary proceedings); Brunner v. New York State Higher Education Services Corp., 831 F.2d 395 (2d Cir. 1987), adopted in this circuit by Hemar Insurance Corp. of America v. Cox (In re Cox), 338 F.3d 1238, 1241–42 (11th Cir. 2003); Educational Credit Management Corp. v. Mosley (In re Mosley), 494 F.3d 1320 (11th Cir. 2007) (the requirements are demanding; a debtor’s detailed and credible testimony as to physical and emotional ailments may establish the additional-circumstances prong without independent corroborating medical evidence); Brosnan v. American Educational Services (In re Brosnan), 323 B.R. 533 (Bankr. M.D. Fla. 2005) (good faith not shown where the debtor never sought to negotiate a payment schedule or pursue a disability discharge before filing, and made no payments or attempts to reduce them afterward).

Part 2: What changed in 2022

Short answer: the government stopped fighting every case and published the standards it now applies.

On November 17, 2022, the Department of Justice, together with the Department of Education, issued guidance telling government attorneys how to evaluate student loan discharge requests in bankruptcy.

Before that, a borrower faced a government lawyer with no published criteria and every incentive to litigate. Now there is a form, there are benchmarks, and there is an instruction to settle cases that meet them.

The mechanism is a standardized Attestation the borrower completes. It asks for five things:

• Background — household size, educational history, student loan history
• Current finances — gross household income, expenses, and assets including real estate, vehicles and any business interests
• Why this will not improve — age, disability, or other circumstances suggesting the situation will persist
• What you have already tried — payment history, consolidation, repayment programs
• Anything else — a free section for facts that do not fit the boxes

The government attorney reviews it alongside a litigation report from the Department of Education. The form is the normal route, not a gate: where the record already shows undue hardship clearly, the Department of Justice can recommend discharge without a formal Attestation at all. If the three factors are satisfied, the attorney stipulates to the facts showing undue hardship and joins in recommending discharge to the court.

That last part is the whole reform. The person who used to be your opponent files a paper agreeing with you.

Three outcomes are possible: a full discharge, a partial discharge where you keep some ability to repay while maintaining a minimal standard of living, or — where the facts do not support it — no stipulation, and the case proceeds to trial.

The court still decides. A stipulation is a recommendation, not an order. The judge must make findings, and the borrower carries the ultimate burden of proof by a preponderance of the evidence even when the government agrees.

Part 3: The three questions, and how they are now answered

This is the part worth reading closely, because the benchmarks are objective and you can measure yourself against them tonight.

The question	How it is now answered
Can you pay now?	Measured against the IRS Collection Financial Standards — the same allowances the IRS uses to decide what a taxpayer can afford. If your allowable expenses equal or exceed your gross income, this factor is satisfied. Arithmetic, not “you feel stretched.”
Will you be able to pay later?	A rebuttable presumption that your inability will persist arises if any apply: you are 65 or older; you have a disability or chronic injury affecting your income potential; you have been unemployed for at least 5 of the last 10 years; you did not obtain the degree the loan was taken out for; or your loans have been in repayment for 10 years or more, not counting in-school and grace periods.
Have you acted in good faith?	Any one qualifying act demonstrates it, absent something that cuts the other way — the list is below, and it is more forgiving than borrowers expect.

A presumption can be overcome by concrete evidence that you will be able to pay. Speculation about your future earning potential does not do it.

On good faith — where borrowers assume they have already lost, and are usually wrong. Any one of the following demonstrates it:

• You made a payment
• You applied for deferment or forbearance
• You applied for an income-driven repayment plan
• You applied for a federal consolidation loan
• You responded to outreach from a servicer or collector
• You engaged meaningfully with the Department of Education or a servicer about repayment options
• You engaged meaningfully with a third-party debt management organization

Never enrolling in an income-driven plan is not, by itself, bad faith. The guidance specifically directs attorneys to weigh servicer errors, misinformation, denials, and simply not knowing the option existed.

One caution, and it comes from a Middle District of Florida case rather than from us. A debtor lost on this prong where she had never tried to negotiate a payment schedule, had never sought a disability discharge before filing her adversary proceeding, and made no payments and no attempt to lower her payments after filing. A borrower who has done nothing, ever, and cannot explain why, is the profile that fails.

The practical lesson runs the other way, though: most of these steps are free, and doing one of them before you file is worth more than arguing about it afterward.

Part 4: Federal loans — what actually happens

Short answer: four steps, and one of them is where unrepresented borrowers lose.

1. File the complaint. An adversary proceeding asking the court to determine that the loans are dischargeable for undue hardship. There is no filing fee for a debtor bringing this complaint.

2. Serve it correctly. This is the step that kills cases. Suing a federal agency requires service on three separate recipients: the United States Attorney for the district, the Attorney General in Washington, and the Department of Education itself. Certified or registered mail, strictly. Serving the agency does not excuse serving the U.S. Attorney.

Cases get dismissed over this. Not on the merits — on the summons.

3. Submit the Attestation. The form goes to the Assistant U.S. Attorney, who obtains a litigation report from the Department of Education covering your loan history, account details and educational record. Formal discovery generally waits while the case is evaluated for settlement.

4. Joint motion and agreed order. If the factors are met, the government stipulates and joins in asking the court to discharge. The judge makes findings and enters the order.

If it does not settle, you try the case. That is a real possibility and anyone who tells you otherwise is selling something — but it is now the exception rather than the starting assumption.

The Middle District of Florida now has its own program for this

This is new — August 2026 — and almost nobody has written about it yet.

The national guidance is Justice Department policy, not a court rule, and the ordinary adversary timeline does not always give the Department of Education enough time to assemble its report. Several districts have responded by building local procedures around it. Ours is one of them.

On August 4, 2026 the court entered Amended Administrative Order FLMB-2026-4, prescribing available procedures in adversary proceedings filed under § 523(a)(8) to determine the dischargeability of student loans held by the Department of Education. It creates the Student Loan Discharge Program.

How it works, in short:

• It is optional. These are procedures available to debtors, not a requirement. You can still run a § 523(a)(8) adversary the ordinary way.
• You file a Notice of Participation in the adversary proceeding.
• You register on an approved portal and complete the court’s document preparation software. The court publishes a list of third-party vendors and is explicit that it is not affiliated with any of them.
• You pay the vendor’s fee directly. The adversary complaint itself still carries no filing fee, but the portal is a real cost and you should know about it before you start.
• When the U.S. Attorney reports the Department’s decision, the parties conclude the adversary proceeding under the court’s rules.
• In a Chapter 13, any necessary plan amendments follow within 30 days of the adversary concluding.

One part of this matters if you are worried about affording it. The order allows debtor’s counsel to take a “no-look” fee as an administrative expense for the student loan work, subject to performing the minimum tasks the order specifies. In a Chapter 13 that means the fee for this work can be paid through the plan rather than out of pocket at the start.

The honest caveat that remains: the program is procedural. It organizes how the information moves; it does not change the standard. And there is still no body of reported Florida or Eleventh Circuit decisions applying the attestation process itself. Expect one of these to take longer than a typical adversary proceeding, and expect it to be handled by someone who knows how the process actually runs rather than only how it reads on paper.

The law behind this: Amended Administrative Order FLMB-2026-4 (United States Bankruptcy Court for the Middle District of Florida, entered August 4, 2026) prescribing available procedures in adversary proceedings under 11 U.S.C. § 523(a)(8) to determine the dischargeability of student loans held by the United States Department of Education; Administrative Order FLMB-2026-3 (fee applications).

The law behind this: 11 U.S.C. § 523(a)(8); Fed. R. Bankr. P. 7001(6); Fed. R. Bankr. P. 7004(b)(4)–(5) (service on the United States, its agencies and officers); United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010) (a discharge of student loans requires the undue hardship determination the Code calls for; the court must actually make it).

Part 5: Private loans — the audit almost nobody runs

Short answer: not every private “student loan” is legally a student loan. If it isn’t, undue hardship never enters the picture.

Federal loans and private loans are protected by different parts of the same statute, and the private one has a definition attached to it — a definition borrowed from the tax code, with conditions that a great many private loans do not actually meet.

A private loan is only protected if it is a qualified education loan: debt incurred solely to pay qualified higher education expenses. And qualified higher education expenses are not “whatever the school charged.” They are the cost of attendance minus scholarships, Pell and other grants, and tax-free educational assistance.

Cost of attendance − grants and scholarships = qualified expenses. If the loan exceeds that figure, it may not be a qualified education loan at all — and a loan that is not a qualified education loan is not protected by § 523(a)(8) at the private-loan level.

You can start this yourself, with two free federal sources:

• IPEDS publishes each institution’s official cost of attendance by year — tuition, room, board, books.
• The NSLDS “My Aid Data” file, downloaded from your StudentAid.gov account, lists every federal loan and grant you received, including Pell and SEOG.

A rough worked example:

Cost of attendance (from IPEDS)	$15,000
Less: Pell Grant	− $5,000
Less: SEOG funds	− $1,000
Qualified education expenses	$9,000
A private loan for that year	$12,000 — exceeds the qualified figure

One shortcut worth knowing: if a loan does not appear on your NSLDS file, it is private.

Lenders push back, and their arguments are not frivolous — they say the loan’s character was fixed when the note was signed, and that a school certification settles the cost-of-attendance question. This is contested ground. But it is ground almost nobody walks onto, and for a borrower carrying high-interest private debt it is worth the look.

The law behind this: 11 U.S.C. § 523(a)(8)(B) (qualified education loans as defined in 26 U.S.C. § 221(d)(1)); 26 U.S.C. § 221(d)(1)–(3) (qualified education loan; qualified higher education expenses; eligible student); 26 U.S.C. § 25A(f)(2), (g)(2); 20 U.S.C. § 1087ll (cost of attendance); In re Quintanilla, 2020 Bankr. LEXIS 3254 (Bankr. M.D. Fla. Nov. 20, 2020) (working through the nested definitions); In re Crocker, 941 F.3d 206 (5th Cir. 2019) (private for-profit loans are not “educational benefits” under § 523(a)(8)(A)(ii) — a Fifth Circuit decision, persuasive but not binding in Florida).

Part 6: Chapter 13 and student loans

Short answer: a developing problem, and worth watching if you are considering a Chapter 13 with large student loan balances.

In a Chapter 13 your student loans sit with the other unsecured debts and receive whatever percentage the plan pays. They are not discharged at the end — but for three to five years, collection stops.

The complication is arithmetic. In 2025 the Fifth Circuit held that where a plan proposes to pay unsecured claims in full, it must pay all of them — student loans included — within the life of the plan. For an above-median earner with a large balance, that can turn a manageable plan payment into an impossible one.

That decision does not bind Florida courts. It is persuasive authority from another circuit, and the question has not been settled here. But the reasoning travels, and the arithmetic is the same everywhere.

There are structural answers where they fit — separately classifying a loan that a co-signer is also liable on, for instance, which the Code expressly permits and which takes that claim out of the pool. Whether any of that applies to you depends entirely on your numbers.

The short version: if you have significant student loan debt and you are choosing between Chapter 7 and Chapter 13, that choice deserves actual analysis rather than a rule of thumb.

The law behind this: 11 U.S.C. § 1325(b)(1)(A); 11 U.S.C. § 1322(b)(1) (separate classification of consumer debts on which another individual is liable with the debtor); Matter of Durand-Day, 134 F.4th 846 (5th Cir. 2025) (Fifth Circuit — persuasive, not controlling in Florida).

Part 7: Doing this without a lawyer

Plenty of people have. Several of the successful cases in this district and others were filed by borrowers representing themselves, and the Attestation is designed to be completed by a person rather than a lawyer.

So we will be straight with you about where the risk actually sits.

It is not the Attestation. It is the summons. Suing a federal agency has service requirements that are unforgiving and counterintuitive, and cases get dismissed on them without anyone reaching the merits. A dismissal on service is not the end of the world — but it costs months, and it happens to people who did everything else right.

It is also the arithmetic, if private loans are involved. The qualified education loan analysis in Part 5 is not hard, but it is exacting, and the lender will not help you run it.

If you are going to do this alone, get the service instructions from the court and follow them literally. If you would rather not, that is what we are for.

Part 8: Experience with these cases

Every case is different and a prospective client may not obtain the same or similar results.

Alan Borden has obtained federal student loan discharges through the DOJ attestation process in three adversary proceedings in the United States Bankruptcy Court for the Southern District of Texas, where he is admitted and maintains a practice. Client names are withheld. (Adv. Pro. Nos. 24-03268, 25-03005 and 25-03006.)

He is admitted in all three of Florida’s federal districts and all four in Texas, and has student loan discharge matters in progress in Florida.

He has also spoken on the subject to other lawyers — presenting on a student loan discharge panel at a Southern District of Texas Bar convention, alongside practitioners from other firms, on the practical mechanics of getting these cases through.

Three cases is three cases. What it means is that the process described on this page is one we have actually run, start to finish, rather than one we have read about.

What to do now

1. Download your NSLDS “My Aid Data” file from StudentAid.gov. It tells you which loans are federal and which are private, and it is the starting point for everything above.
2. Do not assume you have failed the good faith test. Re-read Part 3. One qualifying act is enough.
3. Check your age, your employment history and how long your loans have been in repayment against the presumptions. Any one of them shifts the analysis.
4. If a garnishment or offset has already started, call the same day. Collection resumed in 2025 and it moves faster than people expect.
5. Bring us what you have. Even a rough picture is enough to tell you whether this is worth pursuing.

(813) 231-2088 — the consultation is free.

About this article

Written by Alan Dexter Borden, a Florida consumer bankruptcy attorney admitted to The Florida Bar in 2008 and admitted in all three of Florida’s federal districts.

Last reviewed: September 12, 2026.

This article is general information about federal law, not legal advice about your situation. Every case is different, and the standards and figures described here can change. Reading this does not create an attorney-client relationship.