Bankruptcy Law

Financial Options for Students to Discharge Private Student Loans in Bankruptcy

Many students take out a combination of federal and private student loans to cover the costs of a higher education. Discharging federal student loan debt has been difficult for borrowers struggling to make payments- but there are ways to file for bankruptcy with student loan debt. Private student loans are not handled in the same manner as federal loans when it comes to bankruptcy.

Student borrowers who were not able to repay their loans or did not qualify for public service loan forgiveness or flexible student loan repayment plans, often considered bankruptcy as a back-up plan. After July 1, 2019, this concern will be even more pressing as Congress is hoping to end certain repayment programs, including public service loan forgiveness. For these students, the good news is they will be able to have their private student loans forgiven in bankruptcy, unlike their federal loans.

If the loan is a federal loan, it will only be discharged in the event the borrower is able to claim undue hardship, meaning he or she will need to file a petition for determination of undue hardship with the bankruptcy court. This hurdle can be a tough one for the borrower to clear and often results in the borrower not being able to clear the debt through discharge.

Additionally, if you have private loans that were for a school that is not accredited, the loans can likely be discharged in a bankruptcy. For these loans to be protected and not discharged, the school must be considered an “eligible educational institution” or the private loans must be for a “qualified higher education expense.” To qualify as a private student loan, an accredited school must have also offered Title IV federal loans.

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For borrowers who are struggling with student loan debt, relief options are available.  Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. There are ways to file for bankruptcy with student loan debt.  It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at