Student loan borrowers discharge more debts through bankruptcy filings
Student‑loan borrowers in U.S. bankruptcy have seen a sharp rise in successful debt discharges, with an 87 % approval rate for cases filed between October 2022 and November 2023. The rate climbed from 61 % in 2017 and more than doubled the rate seen two decades earlier. The improvement aligns with a streamlined procedure adopted three years ago that simplifies the legal burden on debtors.
Under the new framework, borrowers submit a 15‑page attestation instead of launching a lengthy adversary proceeding. The Justice and Education Departments published clearer guidelines that identify eligible cases, enabling federal attorneys to recommend discharge to bankruptcy judges. The change was introduced under the Biden administration.
An example of the new system’s impact is a 43‑year‑old licensed practical nurse from Virginia who secured a dismissal of more than $78,000 in federal debt. Her filing followed her husband’s heart attack and a prior bankruptcy, and the case was handled by a lawyer experienced with student‑loan claims. The court’s order cleared the liability, freeing the family from a long‑standing financial obstacle.
In 2025, 1,693 borrowers filed adverse‑process claims, a 12 % increase from 2024 and a 92 % jump over 2023. The average case involves a woman around 47 years old, owing roughly $115,000, with expenses exceeding income by $200 monthly. Most filings are new under the simplified form.
Judges largely follow the federal recommendation, but a minority refuse to grant discharge even when guidelines are met. No current plans exist to dismantle the program, and the policy remains unchanged as new repayment options and enforcement actions evolve.