Student Loan Bankruptcy Success Rates: What the Data Actually Shows

Borrowers who file adversary proceedings to discharge their student loans in bankruptcy succeed 87% of the time. That number comes from a 2025 study of 652 cases filed between October 2022 and November 2023, and it represents a dramatic shift from even a few years ago.

But the 87% figure comes with a caveat most coverage glosses over: it applies almost entirely to federal student loans resolved through a specific government process. Nobody has published equivalent data for private student loans. Here is what the data actually covers, where the gaps are, and what it means for borrowers considering student loan bankruptcy.

The 87% success rate reflects federal student loan discharge cases influenced by the DOJ attestation process. In November 2022, the Department of Justice and the Department of Education introduced a streamlined process for handling bankruptcy cases involving federal student loans. Borrowers fill out a 15-page attestation form detailing their financial situation, and DOJ attorneys evaluate the form against standardized criteria. When the criteria are met, the government recommends discharge rather than opposing it. The DOJ attestation process replaced an approach where government attorneys fought virtually every filing.

When the Department of Justice recommends discharge, the success rate climbs to 98-99%. The overall 87% figure includes cases where the DOJ did not recommend discharge or where cases were dismissed for other reasons.

The process remains in effect under the current administration. The Trump administration has not rescinded the DOJ guidance. The Department of Education has confirmed it has no current plans to change the approach. The DOJ guidance page was last updated in March 2026, and the attestation form was updated in May 2025.

Discharge rates have more than doubled in under two decades. A series of studies tracking adversary proceeding outcomes shows the trajectory:

In 2007, roughly 40% of borrowers who filed adversary proceedings succeeded. Courts applied the undue hardship standard strictly, and most borrowers who tried were turned away.

By 2017, that rate had climbed to 61%. Courts had begun applying the standard with more flexibility, and some districts were settling cases rather than litigating them to judgment.

After the 2022 DOJ guidance, the rate jumped to 87%. The government changed its approach — not the law. Section 523(a)(8) of the Bankruptcy Code still requires a showing of undue hardship for student loans. What changed is how the Department of Justice evaluates and litigates these cases.

Borrowers with attorneys succeeded 91% of the time, compared to 61% for those who filed without one. Filing an adversary proceeding requires reopening a bankruptcy case (if closed), drafting a complaint, responding to discovery, and negotiating with opposing counsel. An attorney’s familiarity with the procedures, the local court’s norms, and the lender’s typical response patterns changes both the quality of the initial filing and the leverage in settlement negotiations.

Filing without an attorney is possible. It takes more time, effort, and willingness to learn unfamiliar procedures, but borrowers have done it successfully. A student loan bankruptcy attorney is not legally required for an adversary proceeding.

Settlement is the dominant resolution path. Out of the 508 successful outcomes in the dataset, 502 came through settlement agreements. Only one case resulted in a discharge on the merits after a full trial. Five ended in default judgments. Nearly all borrowers who succeed do so through negotiated resolution, not courtroom litigation.

What makes settlement more likely is preparation. A detailed complaint supported by tax returns, pay stubs, bank statements, and a thorough income-and-expense breakdown gives the lender what it needs to evaluate the case early. When the opposing side can see the full picture from the complaint and supporting documents, negotiations often begin before heavy discovery or depositions are necessary.

The typical filer was a 47-year-old woman with a median balance of $77,000. The average balance was $115,000, pulled higher by borrowers with six-figure debt. Filers ranged in age from 24 to 76. Women made up 73% of the filings. The median net worth was negative $94,000, and the median monthly income was $3,000. The average amount discharged was approximately $85,000.

Only 595 adversary proceedings were filed in 2023 — out of an estimated 37,000 eligible borrowers. Iuliano’s research shows barely 0.1% of student loan borrowers in bankruptcy take the additional step of filing an adversary proceeding to discharge their debt. The gap between who could file and who actually does remains enormous, driven largely by the persistent misconception that student loans cannot be discharged in bankruptcy at all.

The 87% success rate does not account for private student loans separately. The DOJ attestation process applies only to federal loans held by the Department of Education. Private student loans are not covered by the guidance. The study’s dataset does not break out federal and private outcomes at the loan level, and bankruptcy courts do not code adversary proceedings with a federal or private flag. No researcher has published an aggregated dataset of private student loan adversary proceeding outcomes.

This data gap matters because the legal path to discharging private student loans is different from the federal path — and in some cases, the arguments are stronger.

Three federal circuit courts have held that many private student loans are not “educational benefits” under Section 523(a)(8)(A)(ii). The Second Circuit (Homaidan v. Sallie Mae, 2021), the Fifth Circuit (In re Crocker, 2019), and the Tenth Circuit (In re McDaniel, 2020) have all reached this conclusion. When a private loan does not qualify as an “educational benefit,” the lender bears the burden of proving the loan meets the definition of a “qualified education loan” — including that the loan did not exceed the school’s cost of attendance, that the student was enrolled at least half-time, and that the program led to a degree or certificate. If any condition is not met, the loan is dischargeable like ordinary unsecured debt — without proving undue hardship. The full mechanics of these arguments are covered in the private student loan bankruptcy guide.

Private loans that are qualified education loans still face the undue hardship test — but without the safety valve that federal borrowers have. Courts regularly cite the availability of income-driven repayment plans when evaluating whether federal loan repayment constitutes undue hardship. Private loans have no federal IDR equivalent, no structured deferment comparable to federal forbearance, and no forgiveness programs comparable to PSLF or IDR forgiveness. When a borrower cannot afford payments on a private loan, there is no alternative repayment path to point to — which makes all three prongs of the Brunner test easier to satisfy.

Co-signers add a layer of complexity. Even if a borrower obtains a discharge of a private student loan, the co-signer remains obligated on the debt. Settlement — rather than outright discharge — is often the preferred resolution. A negotiated settlement can include a release of the co-signer as part of the agreement, resolving the obligation for everyone on the loan. The co-signer release takes effect when the borrower makes the final payment under the settlement terms.

Legislation pending in Congress would change this landscape. The Private Student Loan Bankruptcy Fairness Act of 2025 (H.R. 423) would remove private student loans from the bankruptcy discharge exception entirely. The Student Loan Bankruptcy Improvement Act of 2025 (H.R. 4444) would further streamline the discharge process. Neither has advanced out of committee, but both reflect a growing consensus that the current treatment of student loans in bankruptcy is too restrictive. Recent changes under the One Big Beautiful Bill Act — which phase out economic hardship deferments and change the income-driven repayment formula — may make bankruptcy a more relevant option for borrowers whose federal safety nets are narrowing.

Every private student loan adversary proceeding we have resolved has ended favorably for our client. Outcomes include negotiated settlements that reduced balances, consent orders, and default judgments against lenders who failed to respond. Each case is different, and results depend on the specific facts, but the pattern across our resolved cases is consistent.

We have filed adversary proceedings in more than 16 federal districts nationwide. These cases span multiple jurisdictions and judges, across both Chapter 7 and Chapter 13 bankruptcies.

Cases have involved Navient, Sallie Mae, National Collegiate Student Loan Trust, Younomics, MRU Holdings, AccessLex, the Department of Education, and others. Each lender and trust responds differently. Some engage in settlement discussions early when the complaint and supporting financial documentation are thorough. Others require more litigation before negotiations begin. Many cases resolve in two to four months from filing to settlement.

Three factors indicate whether filing an adversary proceeding is worth evaluating.

The payments are unaffordable even with restructuring. If the borrower cannot afford the monthly payment and refinancing would not bring it within reach, the current loan structure is unsustainable. This is especially relevant for private student loans that do not offer income-driven repayment or deferment options.

A settlement after default is also unaffordable. Some borrowers default and then negotiate a settlement directly with the lender. If the borrower cannot afford a realistic settlement amount either, the options outside of bankruptcy may be exhausted.

The borrower has been paying for a decade or more, and the balance has not decreased. When a borrower has made payments for 10, 15, or 20 years and still owes as much as — or more than — the original amount borrowed, interest has turned the debt into something that cannot be repaid through the existing payment structure. Bankruptcy may be the only path that produces a different outcome.

These are starting points, not a checklist. Whether an adversary proceeding is the right path depends on the full picture: the type of loan, the borrower’s financial circumstances, whether there are co-signers, and what other options (if any) remain available. Borrowers also exploring non-bankruptcy options can read about student loan forgiveness programs.

Borrowers considering this path can schedule a consultation to evaluate their situation.