NACTT Statement on Dischargeability of Student Loan in Bankruptcy

COLUMBIA, S.C.--()--With the Supreme Court opinion on the Biden Student Loan Debt Relief Program, the National Association of Chapter 13 Trustees (NACTT) remains committed to helping Americans facing financial hardship obtain a fresh start through bankruptcy.

To discharge a student loan in bankruptcy the borrower must show that paying it back would impose an “undue hardship.” Most courts require a borrower to meet three elements to discharge a student loan: (i) a borrower cannot maintain a minimal standard of living for self and family if forced to repay the loan; (ii) the borrower has made a good faith attempt to repay the loan; and (iii) the borrower shows that the hardship would continue for a substantial period of the repayment term.

In November 2022, the Biden Administration issued new guidelines to standardize the criteria to discharge Federal student loans, making it easier and less expensive to discharge student loans in bankruptcy than at any time in the last 15 years. The Supreme Court decision reiterates that borrowers can still discharge student loans in bankruptcy and those new guidelines are unaffected.

If a student loan borrower is experiencing financial hardship, the NACTT recommends they reach out to a consumer bankruptcy attorney in their state for advice. The National Association of Consumer Bankruptcy Attorneys and state bar associations maintain a list of attorneys in every state and Puerto Rico, who can assist struggling Americans determine if bankruptcy is the right option.

If a borrower owes Federal student loans, another alternative is to enter an Income-Driven Repayment Plan, where the monthly payment is based upon a percentage of income.

“Income-Driven Repayment plans can be entered into by Federal student loan borrowers whether a borrower is in bankruptcy or not,” says Scott F. Waterman, Chapter 13 Trustee, Eastern District of Pennsylvania, and Chair of the NACTT Student Loan Committee. “If a borrower enrolls in one of these plans, at the end of the repayment period which can last up to 20 years, any remaining balance is forgiven.”


Founded in 1965, the National Association of Chapter 13 Trustees is a membership association comprised of more than 1,000 trustees, attorneys, certified public accountants, and others interested in insolvency related issues. The association is dedicated to the highest standards of education related to Chapter 13 bankruptcy. For additional information visit


Beth Hawks