Lindsey Haynes

Document Type

Research Memorandum

Publication Date




The United States Bankruptcy Code (the “Code”) makes it more difficult to discharge student loan debt than other debts. Student loans are treated differently from other loans because they are presumptively nondischargable. The government wants to ensure young debtors with promising future income streams remain liable to preserve student loan funding in the future. More specifically, section 523(a)(8) of the Code prevents abuses of the educational loan system and protects the continued viability of student loan programs. But, if certain circumstances are proven, student loan debt can be discharged.

The Code states if repayment “would impose an undue hardship on the debtor and the debtor’s dependents,” discharge might be available. However, congressional intent indicates that debtors are to repay student loans “in all but the most dire circumstances.”

Because the Code does not define “undue hardship,” courts have developed a variety of tests to determine when a debtor satisfies this standard. These tests are premised upon a case by case analysis that is dominated by a specific factual inquiry. This is a case-specific, fact-dominated standard.

In the Second Circuit, courts apply the Brunner test. This test balances financial integrity of student loan programs with the personal and financial sacrifices a debtor should make to repay student loans. Debtors who have received the benefits of an education funded by taxpayer dollars should not be able to dismiss their obligation to repay their loans merely because it would require major personal and financial sacrifices. All circuits, except the First and Eighth, have adopted the Brunner test; it is widely recognized as the majority approach.

Part I of this memorandum discusses the elements of the majority approach as set forth in the Brunner test and how bankruptcy courts have interpreted these elements. Part II of this memorandum explains the minority approach to the undue hardship standard, the totality of the circumstances test.


To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.