If you’re struggling with student loan debt and wondering whether bankruptcy can help, the short answer is yes, you can file bankruptcy while owing student loans. However, filing bankruptcy does not automatically erase those loans. Depending on the type of loan and your financial circumstances, you may be able to have some or all of the debt discharged.
In this guide, we’ll explain when student loans can be discharged, what “undue hardship” means, how the bankruptcy process works, and how federal and private student loans are treated differently. We’ll also cover what happens to your loans if they are not discharged.
Can You File Bankruptcy on Student Loans?
Yes. You can file bankruptcy while owing student loans, but filing bankruptcy and getting your student loans discharged are two different things. Student loan debt covered by 11 U.S.C. § 523(a)(8) is generally not discharged automatically; you normally need to show that continued repayment would create an undue hardship through a separate bankruptcy proceeding.
Student loans can be included in a bankruptcy case whether they are federal or private, but their treatment can differ. Federal loans held by the Department of Education are subject to the DOJ’s standardized bankruptcy-discharge process, while private loans are not covered by that federal process and must be evaluated under the applicable bankruptcy rules and the type of loan involved.
Can Student Loans Be Discharged in Bankruptcy?
Yes, student loans can potentially be discharged in bankruptcy, but they do not receive the same treatment as most unsecured debts. Under 11 U.S.C. § 523(a)(8), qualifying student loan debt generally remains after bankruptcy unless repaying it would cause undue hardship. Getting that relief usually requires a separate adversary proceeding where the court determines whether a full or partial discharge is justified.
Which Student Loans Can Be Discharged in Bankruptcy?
Not every education-related debt receives the same treatment in bankruptcy. Federal student loans and many private education loans generally fall under the Bankruptcy Code’s special student-loan rules, but some private loans may fall outside that protected category. The key issue is how the loan was used, where you studied, and your enrollment status. If you’re also trying to understand how federal student aid works before taking on or managing education debt, you can check the FAFSA opening date and key deadlines for 2026–27.
Federal Student Loans
Federal student loans can be discharged in bankruptcy if the borrower meets the applicable undue hardship standard. They are generally subject to the special protection in Section 523(a)(8), meaning bankruptcy does not automatically eliminate them. The borrower must establish that continuing to repay the qualifying debt would create the required level of financial hardship.
Private Student Loans
Private student loans can also be affected by bankruptcy, but their treatment depends partly on whether the debt falls within the Bankruptcy Code’s protected education-loan category. A private loan that qualifies may require an undue-hardship determination, while some education-related loans outside that category may receive ordinary bankruptcy discharge treatment.
When a Private Student Loan May Be Treated Differently
Some loans borrowers commonly call “private student loans” may not meet the legal definition of a protected education loan. The CFPB identifies several examples, including loans exceeding the school’s cost of attendance, loans for non-Title-IV schools, professional exam expenses, certain medical or dental residency costs, and loans taken while attending less than half-time.
- Loan exceeding the school’s cost of attendance: A loan amount above the school’s recognized cost of attendance may fall outside the protected category, particularly when excess funds were provided directly to the borrower.
- Certain loans for schools not eligible for Title IV funding: Loans used for education at schools that cannot participate in federal Title IV aid programs, including certain unaccredited or foreign schools, may receive different bankruptcy treatment.
- Loans for professional examination expenses: Borrowing used for fees or living expenses while preparing for the bar exam or another professional examination can fall outside the protected student-loan category.
- Certain medical/dental residency expenses: Loans covering qualifying residency-related expenses, such as fees, living costs, or moving expenses connected with medical or dental residency, may also be treated differently.
- Loans made while attending school less than half-time: A loan taken while the borrower was enrolled less than half-time may not satisfy the requirements for a qualified education loan and therefore may receive different treatment in bankruptcy.
Important: These examples do not mean every loan with one of these characteristics is automatically dischargeable. The exact legal classification depends on the loan terms, how the funds were used, and the requirements of the Bankruptcy Code.
Do You Have to Prove Undue Hardship to Discharge Student Loans?
Yes. For student loans covered by the Bankruptcy Code’s nondischargeability rules, you generally must show that continuing to repay the debt would cause undue hardship. The current DOJ process evaluates three key areas: your ability to pay now, whether your financial hardship is likely to continue, and whether you have made reasonable efforts to address the debt.
Your Current Ability to Pay
The first question is whether you can make your student loan payments while maintaining a minimal standard of living. The assessment looks at your income, necessary expenses, and overall financial circumstances rather than simply whether you have a low income. If you’re reviewing your broader federal student-aid situation, understanding how the Student Aid Index (SAI) is calculated can also help explain how financial information is used in determining aid eligibility.
Your Future Ability to Pay
You also need to show that your inability to repay is likely to persist. Factors affecting this assessment can include your age, disability or chronic injury, employment history, education, and other circumstances that may limit your future earning ability.
Your Good-Faith Efforts
The court may consider whether you have made reasonable efforts to earn income, manage expenses, and deal with your student loans. Contacting your loan servicer, exploring available payment options, and your overall repayment history may be relevant. Past nonpayment or failure to use an income-driven repayment plan does not automatically establish a lack of good faith.
How Do You Discharge Student Loans Through Bankruptcy?
Discharging student loans through bankruptcy is a separate process from simply filing the bankruptcy case. Generally, you must ask the bankruptcy court to determine whether the loans qualify for discharge and provide evidence supporting your claim of undue hardship.
1. File the Bankruptcy Case
You first file a Chapter 7 or Chapter 13 bankruptcy case and include your student loan debts in the required bankruptcy paperwork.
2. List the Student Loans
Identify each student loan, including the lender or loan holder and the amount owed. Listing the debt does not automatically discharge it.
3. File an Adversary Proceeding
To seek a student-loan discharge, you generally need to file an adversary proceeding within the bankruptcy case. This is the separate court process used to determine whether the student-loan debt can be discharged.
4. Provide Evidence of Undue Hardship
You must show why repaying the student loans would create an undue hardship. The analysis can consider your current financial situation, likely future circumstances, and past efforts to repay.
5. Complete the DOJ Attestation for Federal Loans
For applicable federal student loans, the DOJ uses a standardized attestation process to gather information about your income, expenses, repayment history, and financial circumstances.
6. The Government or Loan Holder Responds
The government or private lender reviews the discharge request and may agree with, oppose, or otherwise respond to the requested relief. For federal loans, DOJ attorneys can recommend a full or partial discharge when the facts support it.
7. The Bankruptcy Court Makes the Decision
The bankruptcy judge makes the final determination on whether the student loans qualify for discharge. A DOJ recommendation does not itself discharge the debt.
8. The Court May Grant Full, Partial, or No Discharge
Depending on the evidence and applicable law, the court may discharge all of the qualifying student-loan debt, part of it, or none of it. DOJ guidance specifically allows for recommendations supporting partial discharge where a complete discharge is not appropriate.
Explore our student financial aid guides for more 2026 updates and explanations.
Chapter 7 vs. Chapter 13 for Student Loans
Both Chapter 7 and Chapter 13 bankruptcy can include student loans, but neither automatically discharges them. The main difference is whether you seek a discharge within a liquidation case or while repaying debts through a court-approved plan.
| Chapter 7 | Chapter 13 | |
| Student loans included? | Yes | Yes |
| Automatic discharge? | No | No |
| Student-loan discharge possible? | Yes, if the required undue-hardship process is met | Yes, if the required undue-hardship process is met |
| Repayment plan | No | Usually 3–5 years |
| Main difference | Faster overall bankruptcy process | Structured repayment while the case is active |
When Chapter 7 May Be Relevant
Chapter 7 may be relevant when the borrower needs broader debt relief and cannot realistically repay qualifying student-loan debt. The student loan itself still requires a determination of undue hardship rather than being erased simply because Chapter 7 is filed.
When Chapter 13 May Be Relevant
Chapter 13 may be relevant when the borrower has regular income and needs a 3–5 year repayment structure while addressing their debts. Student loans generally remain subject to the bankruptcy discharge rules, so completing the repayment plan does not by itself mean the remaining student-loan balance is discharged.
For either chapter, a borrower seeking student-loan discharge generally needs the appropriate adversary proceeding and undue-hardship determination; the bankruptcy court makes the final decision.
What Happens to Student Loans During Bankruptcy?
When you file bankruptcy, the automatic stay generally stops most collection activity, including lawsuits and wage garnishment, against debts covered by the stay. However, the bankruptcy filing does not automatically discharge student loans, so the underlying debt may still exist while your case is pending.
Are Student Loan Payments Stopped?
The automatic stay generally pauses collection efforts after a bankruptcy petition is filed, which can temporarily stop a lender or servicer from pursuing payment. However, this does not mean the student loan has been forgiven or discharged. The stay can also end when the bankruptcy case is closed, dismissed, or discharged.
Does Wage Garnishment Stop?
Generally, filing bankruptcy triggers the automatic stay, which stops most collection actions, including wage garnishments related to debts covered by the stay. This protection is temporary, though, and the garnishment may resume if the student loan survives bankruptcy after the stay ends.
Does Interest Continue to Accrue?
Bankruptcy does not automatically eliminate the student-loan debt, so interest may continue to accrue while the loan remains legally outstanding. The exact treatment can depend on the loan and bankruptcy circumstances. If the debt is ultimately discharged, the discharge order determines what you no longer owe.
What Happens to Student Loans After Bankruptcy?
The outcome depends on whether the student loans are discharged. If the bankruptcy court grants a discharge, the discharged debt is no longer owed according to the discharge order. If the loans are not discharged, the obligation generally remains, and collection or payment requirements can resume after applicable bankruptcy protections end.
What If My Student Loans Were Not Discharged?
If your student loans survive bankruptcy, you may still have options depending on the loan. Eligible federal borrowers may consider income-driven repayment, while deferment or forbearance may provide temporary relief when available. Private lenders may offer their own hardship programs. In some situations, reopening the bankruptcy case may also be worth discussing with an attorney.
Can You Discharge Student Loans After Your Bankruptcy Case Is Closed?
A closed bankruptcy case does not necessarily mean a student-loan discharge is impossible. Depending on the circumstances and applicable bankruptcy rules, a case may potentially be reopened and an adversary proceeding used to address dischargeability. A change in financial circumstances may also affect whether a later discharge request can succeed.
Conclusion
You can file bankruptcy with student loans, but they are not automatically erased. Qualifying federal and private loans may be discharged if you prove undue hardship through the required bankruptcy process. The 2026 DOJ process can simplify federal loan review, while private loans depend on their legal classification. If your loans survive, repayment or other relief options may still be available.