For decades, student loan borrowers have heard the same frustrating refrain: “You can’t get rid of student loans in bankruptcy.” But in 2025, that narrative is shifting. Thanks to new policies and growing legal awareness, more borrowers than ever are exploring bankruptcy as a possible path to relief.
So, can you actually wipe out student loans in bankruptcy? The answer is yes — but it’s complicated. In this guide, we break down the latest updates, what the law really says, and how you might qualify to finally break free from crushing student debt.
📘 Why Student Loans Are Different Student loans have long been treated differently than credit cards or medical bills in bankruptcy. Since the 1970s, U.S. law has required borrowers to prove “undue hardship” — a notoriously tough standard — to discharge student debt.
🔒 The Undue Hardship Test (Brunner Test) Most courts use the Brunner Test, which requires proving:
- You can’t maintain a minimal standard of living while repaying the loan.
- Your financial situation is unlikely to improve.
- You made a good-faith effort to repay the loans.
Historically, this was an uphill battle. But recent changes are making it easier.
🔄 What’s New in 2025? In 2022, the U.S. Department of Justice and Department of Education rolled out updated guidance, aiming to standardize and simplify the process for discharging federal student loans. Under this new framework:
- Borrowers submit a hardship attestation form.
- The government may support discharge if you meet hardship criteria.
- Courts apply a clearer, fairer process.
This doesn’t guarantee discharge, but it significantly lowers the barriers many faced before.
🏛️ Federal vs. Private Student Loans
- Federal Loans: Covered by the new DOJ guidance, including Direct Loans, FFEL, and Perkins Loans.
- Private Loans: Still harder to discharge. However, loans for non-qualified educational expenses (like bar study or unaccredited programs) might be treated like regular debt.
📊 Chapter 7 vs. Chapter 13 Bankruptcy
- Chapter 7: Fast liquidation process (3–4 months). Loans can be discharged if you prove undue hardship.
- Chapter 13: Sets up a 3–5 year repayment plan. You might qualify for discharge at the end if hardship persists.
📝 Steps to Seek Student Loan Discharge
- Hire a bankruptcy attorney experienced in student loans.
- File for Chapter 7 or 13 bankruptcy.
- File an adversary proceeding (a special lawsuit) to request loan discharge.
- Complete the DOJ hardship attestation (for federal loans).
- Await court and lender decisions.
📢 Caution: Bankruptcy impacts your credit for 7–10 years and discharge isn’t guaranteed. Consider all options, including IDR plans or PSLF, before filing.
🤔 Final Thoughts Discharging student loans in bankruptcy isn’t automatic, but it’s no longer impossible. New rules are giving struggling borrowers a chance to prove their case and find real relief.
If debt feels like it’s crushing you, consult a legal professional. Bankruptcy might just be your path to a fresh start.