Kimberly Lee

Document Type

Research Memorandum

Publication Date




Section 523 of title 11 of the United States Code (the “Bankruptcy Code”) prevents former students from discharging certain educational debts in bankruptcy, unless the failure to discharge “would impose an undue hardship on the debtor and the debtor’s dependents.” Typically, it is a debtor’s burden to show that their loans may be discharged on the grounds of “undue hardship.” However, Congress has not defined “undue hardship” leaving jurisdictions divided regarding the appropriate test. Most courts have followed the Brunner three-prong test, while only the First and Eighth Circuits use the totality of the circumstances test.

Additionally, section 523(a)(8) of the Bankruptcy Code does not explicitly state that all student loans are excepted from discharge; thus, courts are split on whether private student loans are non-dischargeable. Recent case law suggests that certain private student loans may be dischargeable.

This memorandum explores whether private student loans can be discharged under section 523(a)(8) of the Bankruptcy Code without meeting the undue hardship requirement and if not, the two ways a debtor can prove undue hardship. Part I discusses (a) an overview of section 523(a)(8); (b) the general reasons why courts have held that the private student loans are non-dischargeable absent a showing of undue hardship; and (c) the growing trend toward permitting a debtor to discharge certain private student loans. Part II describes the different standards used to determine whether excepting a debt from discharge will impose an undue hardship on the debtor and its dependents.


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