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Bankruptcy Law Changes: Student Loan Debt Discharge Is Now Easier for Borrowers

Student loan debt is one of the most significant financial burdens faced by Americans today, with more than 43 million people in the United States owing a total of $1.7 trillion in student loans.[1] To alleviate this financial crisis, bankruptcy laws have undergone significant changes that may make it easier for borrowers to discharge their federal student loans in bankruptcy.

Borrowers are required to prove “undue hardship” to discharge their student loan debt in bankruptcy, which previously made the process overly burdensome and intrusive. Very few Debtors were granted a discharge of their student loans. However, recent updates  now allow borrowers to discharge their student loan debt more easily.

The Justice Department recently updated the attestation form that borrowers must complete to seek bankruptcy discharge of their federal student loans. These updates include tweaks to reporting monthly household income, clarifying instructions regarding when a borrower needs to provide additional information, and new questions seeking details on whether a school closure has impacted a borrower’s ability to repay their student loans.

Furthermore, if the borrower is disabled, the disability does not have to be “permanent,” only “chronic,” to be a basis for a bankruptcy discharge. This change is a significant improvement because, previously, it was difficult for borrowers to qualify for a discharge on the basis of disability.

The Department of Justice, in conjunction with the Department of Education, issued new guidance to simplify the process and establish standards for borrowers who seek to discharge their federal student loans in bankruptcy. The guidance is aimed at ensuring consistent treatment of the discharge of federal student loans, reducing the burden on borrowers, and making it easier to identify cases where discharge is appropriate.

Advocates have welcomed these changes as they help to rectify the current bankruptcy court practice, which has made it challenging for borrowers to discharge their student loan debt, while also requiring excessive personal information from the debtor.

It is still too early to determine the success of these updates, but if you are interested in pursuing a bankruptcy discharge of your federal student loans, it is crucial to consult with a bankruptcy attorney licensed to practice in your state. At Tucker Griffin Barnes P.C. in Charlottesville, Virginia, we will give you the careful, skillful legal counsel you need to maximize your chances of discharging the debt. For a free consultation, call us at 434-973-7474 or contact us online.

In summary, recent updates are a significant step towards making it easier for borrowers to discharge their federal student loan debt in bankruptcy. If you are struggling with student loan debt, do not hesitate to speak with an experienced bankruptcy attorney who can help you navigate the legal system and understand your options.


Written by Attorney Lynn Bradley

Bankruptcy Attorney







Lynn Bradley

Bankruptcy Attorney

Tucker Griffin Barnes P.C.

With four convenient offices located in Charlottesville, Palmyra, Harrisonburg, and Staunton, VA.

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