Student loan debt has traditionally been extremely difficult to discharge in bankruptcy. For years, student loan borrowers and advocates have been pushing for legislation to make this process easier. The Biden administration has made statements indicating they will make this process easier in the future, although it is unclear when or if this will ever happen.
It is not impossible to discharge student loan debt in bankruptcy. The bankruptcy code does allow for it, but the test to demonstrate the need for discharging student loan debt has been difficult for borrowers to prove. Unlike other consumer debts, to receive a discharge from their student loan debt, the borrower must prove that repaying these loans would put an undue hardship on them. Unfortunately, the definition of what qualifies as an “undue hardship” is found within the U.S. bankruptcy code, which means defining this standard has been left to individual courts. Certain jurisdictions have made the standard next to impossible to meet, while others have been somewhat more lenient. Regardless, no consistent standard has been set.
