The Myth That Has Kept Borrowers From Seeking Relief
For decades, the conventional wisdom was simple: student loans cannot be discharged in bankruptcy. Period. That belief — repeated by financial advisors, repeated online, and unfortunately even repeated by some attorneys — has caused millions of Americans to suffer under crushing student loan debt without ever exploring their legal options. It was never entirely true. And today, it is significantly less true than ever before.
Americans currently owe more than $1.78 trillion in student loan debt. The weight of that debt is not abstract. It delays marriages, prevents home purchases, deters family planning, and — in the most sobering statistic from a 2021 mental health survey of over 2,300 high-debt borrowers — 1 in 14 reported experiencing suicidal ideation at some point during their repayment journey. This is a crisis that deserves real legal solutions. And those solutions now exist.
“Student loans can be discharged in bankruptcy. That has always been true for borrowers who meet the undue hardship standard — but that was a high threshold to meet until the landmark 2022 policy shift known as the Department of Justice Guidance Policy, which has made discharging student loans easier.”
A Note on Jenny L. Doling’s Work in This Area
Teaching the Profession — From the Inside
Jenny L. Doling is one of the only bankruptcy attorneys in California actively handling student loan discharge adversary proceedings. Her expertise in this area is recognized at the highest levels of the legal practice: she was recently invited to co-present a legal education webinar on student loan discharge alongside the Honorable Magdalena Reyes Bordeaux, United States Bankruptcy Judge for the Central District of California, and Elan Levy, an attorney from the United States Attorney’s Office representing the Department of Education.
The webinar drew overwhelming attendance from California bankruptcy attorneys and others from around the country. Ms. Doling’s hope is that more consumer bankruptcy attorneys will begin representing student loan borrowers — so that the relief now available under the law actually reaches the people who need it.
A Brief History: How Student Loans Became So Hard to Discharge
Before 1976, student loan debt could be discharged in bankruptcy just like credit card debt or medical bills. Congress changed that, citing a concern — not well-supported by data — that borrowers were using bankruptcy to escape their loans shortly after graduating. The reality, as documented later, was that less than 1% of student loan debt had ever been discharged in bankruptcy. The restriction was based on a myth.
The result was 11 U.S.C. § 523(a)(8), requiring borrowers to prove “undue hardship” to discharge their student loans — a standard that courts interpreted in wildly inconsistent ways, often setting the bar so high that virtually no one could clear it.
The Undue Hardship Standard and the Brunner Test
In California and most of the country, courts apply what is known as the Brunner Test to evaluate whether a borrower has demonstrated undue hardship. The test requires showing three things:
Minimal standard of living.
The debtor cannot maintain a minimal standard of living for themselves and their dependents if forced to repay the loans.
Persistent circumstances.
The financial situation is likely to persist for a significant portion of the repayment period — this is not a temporary hardship.
Good faith effort.
The debtor has made good-faith efforts to repay the loans, including through deferments, forbearances, or income-driven repayment programs.
Some courts have criticized the Brunner Test as too restrictive. The 8th Circuit has moved to a “totality of circumstances” approach. The 9th Circuit — which governs California — still applies Brunner, but the 2022 DOJ guidance has changed how the government itself litigates these cases, making a significant practical difference.
The 2022 DOJ Guidance: A Turning Point
On January 27, 2022, the Department of Justice issued landmark guidance — effective November 17, 2022 — that established a structured, standardized process for evaluating student loan discharge cases in bankruptcy. The goals of the DOJ guidance are threefold: provide clarity and consistency so borrowers understand what is expected; stop the government from vigorously opposing discharge in cases where the facts support it; and ultimately extend relief to borrowers who genuinely cannot repay their loans.
How the Process Works
1. File for Bankruptcy and File the Adversary Proceeding
A student loan discharge can only be pursued inside a bankruptcy case. Once the bankruptcy is filed, your attorney files a separate “adversary proceeding” — essentially a lawsuit within the bankruptcy case — naming the Department of Education (and any other loan holders) as defendants.
2. The DOJ Contacts Your Attorney
After the Department of Education is properly served, a DOJ attorney will contact your counsel and provide the standardized Attestation Form.
3. Complete and Submit the Attestation Form
The Attestation Form — executed under oath — is the heart of the process. It documents your financial circumstances, employment history, health, and efforts to repay. It is not filed with the bankruptcy court. This is where your attorney is invaluable. Your attorney will build your case, advocate for the most favorable characterization of the facts, and ensure nothing is left on the table.
4. DOJ Reviews and Forwards to the Department of Education
The DOJ reviews your Attestation Form, may request additional information, and then forwards its recommendation to the Department of Education.
5. Stipulation Filed — or Dismissal Considered
If the DOE agrees that undue hardship exists, the parties file a stipulation and proposed order with the bankruptcy court. If agreed, the court enters the discharge order. If the DOE does not agree, the adversary proceeding continues, and the case is litigated.
Real Results: What Discharge Looks Like
These are not hypothetical outcomes. These are actual results Jenny Doling received for her clients. They are the kinds of results that are now achievable — for the right borrowers, with the right representation.
Case A — Full Discharge: $254,000 → $0
Debtor, age 54. Borrowed $40,000 in the 1990s. Balance had ballooned to $254,000. Full discharge granted.
Case B — Full Discharge: $89,000 → $0
Debtor, age 72. Late-in-life divorce. Returned to nursing school. Needed to retire but carried $89,000 in loans. Full discharge granted.
Case C — Partial Discharge: $159,000 → $26,000
Debtor, age 45. Chronic autoimmune disease. Earns approximately $60,000/year with frequent work interruptions due to flare-ups. Partial discharge granted, reducing balance from $159,000 to $26,000.
Could You Qualify?
Student loan discharge may not be viable for everyone. It requires careful legal analysis of your specific circumstances. The following factors may support a discharge:
- You have a chronic illness, disability, or mental health condition that affects your ability to work
- You care for a dependent with significant health needs
- Your loan balance has grown far beyond the original amount borrowed due to interest and fees
- You did not complete your degree or program of study
- You have been on income-driven repayment, deferment, or forbearance for years without making meaningful progress
- You are near or at retirement age with no realistic ability to repay the debt
- Your income is unlikely to increase enough to service the debt over any reasonable timeframe
A note to borrowers who have already consulted a bankruptcy attorney and were told discharge is impossible: please get a second opinion. That advice may have been accurate before 2022. It may not be accurate now.
Frequently Asked Questions
Can student loans be discharged in bankruptcy?
Yes. Student loans can be discharged in bankruptcy if the borrower demonstrates that repayment would impose an “undue hardship.” The 2022 DOJ guidance has made this process more accessible and more predictable than it has ever been. Call (844) 894-4440.
What is the undue hardship standard for student loan discharge?
In California (9th Circuit), courts apply the Brunner Test: the debtor must show they cannot maintain a minimal standard of living while repaying the loans, that this condition is likely to persist, and that they have made good-faith efforts to repay.
What is the DOJ guidance on student loan discharge?
Effective November 17, 2022, the DOJ established a structured process for evaluating student loan discharge cases in bankruptcy, including a standardized Attestation Form. The guidance directs the government not to oppose discharge where the facts support it.
What is a student loan adversary proceeding?
A student loan adversary proceeding (SLAP) is a lawsuit filed within a bankruptcy case seeking to discharge student loan debt. It is filed against the Department of Education and any private loan holders. An attorney experienced in these proceedings is essential.
Can I get a partial discharge of my student loans?
Yes. Courts can reduce a student loan balance to a manageable amount rather than discharge it entirely. For example, a $159,000 balance might be reduced to $26,000 based on the borrower’s circumstances, income, and health.