Does bankruptcy discharge student loan debt?

On Behalf of | Nov 28, 2023 | Bankruptcy, Blog |

Higher education is both an opportunity and a barrier. Its achievement opens doors while its lack closes them.

However, the rising costs of obtaining a college education force many to take on immense student loan debt. These debts can be a burden on them as they try to establish careers and families. Many may turn to bankruptcy as a potential solution, but student loans are a complex area.


In the realm of bankruptcy, not all debts are equal. While certain debts, such as credit card balances or medical bills, are dischargeable, student loans are generally more challenging to discharge. Federal student loans, in particular, have stringent criteria for discharge, making it a less common outcome.

Chapter 7 bankruptcy involves the liquidation of assets to repay creditors. While it can provide relief for some types of debt, it typically does not discharge student loans unless the borrower can prove an undue hardship. This requires demonstrating a persistent inability to maintain a minimal standard of living while repaying the loans. Debtors also generally must show that they in good faith made an effort to repay them.


Chapter 13 bankruptcy involves creating a repayment plan to settle debts over a specified period. While this structure may offer more flexibility, it also does not guarantee the discharge of student loans. Similar to Chapter 7, proving undue hardship remains a requirement for discharging them. However, Chapter 13 may allow individuals to restructure their student loan payment plan in some situations.

According to Axios, the total Tennessee student debt is approximately $32.5 billion. Student loan debt can seriously impact quality of life and can become overwhelming as interest accrues. While it generally falls under the category of undischargeable by bankruptcy, if a debtor can prove undue hardship, it may become dischargeable. It can also be part of a restructured payment plan through Chapter 13 bankruptcy.


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