Document Type

Research Memorandum

Publication Date




As a general matter, most student loans are excepted from discharge under section 523 of title 11 of the United States Code (the “Bankruptcy Code”). The Bankruptcy Code prohibits discharge of certain student loans unless doing so “would impose undue hardship on the debtor and [their] dependents . . . .” Student debtors seeking to discharge student loan debt must file an adversary proceeding and demonstrate “undue hardship” — a difficult burden to meet. However, not all student loans may be subject to this requirement.

Jurisdictions are divided on whether unqualified student loans, i.e., loans outside the cost of tuition for a Title-IV eligible school are dischargeable in bankruptcy. Recent case law, however, suggests that they are. This memorandum explores this issue in a twofold approach. Part I analyzes section 523(a)(8)(A)(ii), the governing provision addressing unqualified loans, as well as the two prevailing interpretations and their effect on dischargeability. Part II compares the different interpretations as well as the overall likelihood of discharge.


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