Bankruptcy Success for Student Loan Borrowers Is Surging — Here’s What the 87% Stat Really Means

Introduction

For years, student loan borrowers have been told the same thing:

“Student loans can’t be discharged in bankruptcy.”

But new research suggests that narrative is outdated and for borrowers who actually take the extra step to ask the court for a student-loan discharge, the odds have improved dramatically.

A recent analysis published in The American Bankruptcy Law Journal found that student loan borrowers who pursue discharge in bankruptcy are succeeding at much higher rates as high as 87% in the post-reform period studied. (American Bankruptcy Law Journal)

At Key2DebtFree, we’re not telling everyone to run to bankruptcy. But we are saying this: borrowers deserve accurate information and real options especially in 2026’s repayment chaos.

What the Study Found (And Why It’s Getting Attention)

The research reviewed hundreds of bankruptcy cases that included student loans and tracked outcomes for borrowers who requested discharge through the required process (an “adversary proceeding”). (American Bankruptcy Law Journal)

Key takeaway:

• Borrowers who actually filed for student-loan discharge were successful at very high rates in the time period reviewed much higher than older historical outcomes often cited. (American Bankruptcy Law Journal)

And that matters because the public perception is still stuck in the 2000s: “It’s impossible.” The data suggests it’s not impossible but it’s also not automatic.

Why Success Rates Improved: The 2022 Federal Bankruptcy Guidance

One major reason outcomes improved is the updated federal approach announced in November 2022 by the U.S. Department of Justice and Department of Education.

Those agencies created a more standardized process for evaluating “undue hardship” including a formal attestation form that borrowers complete to explain their situation. (Department of Justice)

Important detail for borrowers watching policy shifts:

• The Trump administration has not rescinded the guidance, and reporting indicates the Department currently has no plans to change course. (American Bankruptcy Law Journal)

This standardized process can make it easier for the government to review cases consistently — and can reduce the “fight it at all costs” vibe that used to dominate student loan bankruptcy attempts.

The Biggest “Myth” the Study Highlights

Here’s the part most borrowers don’t know:

Even with better odds, very few people actually try.

Many borrowers file bankruptcy but never file the separate action needed to request student loan discharge (the adversary proceeding). And many attorneys still don’t raise it as an option because the old myth is so deeply ingrained. (American Bankruptcy Law Journal)

So the win rate can climb… while most struggling borrowers never access the relief.

When Bankruptcy Might Enter the Conversation

Bankruptcy is never a casual decision but the study reinforces that for some borrowers, it may be a legitimate tool, especially when:

• The balance has ballooned due to years of interest and fees

• Income or health circumstances make repayment unrealistic long-term

• The borrower has already exhausted affordable repayment pathways

• The financial strain is affecting basic needs (housing, food, stability)

This is especially relevant heading into 2026 as borrowers face repayment disruption, servicer issues, tighter relief access, and rising default pressure in parts of the system.

What to Do If You’re Curious About This Option

If bankruptcy is even on your radar, here’s the K2DF way to approach it:

1) Don’t assume you’re “stuck forever”

The data suggests borrowers who pursue discharge are having more success than most people realize. (American Bankruptcy Law Journal)

2) Understand that it’s a separate process

Student loan discharge generally requires an adversary proceeding, not just a standard bankruptcy filing. (This is where many people stop too early.) (NCLC Digital Library)

3) Get a real evaluation, not internet advice

Bankruptcy law is fact-specific, and outcomes depend on your situation, your loans, and how your case is presented. A consult with a qualified bankruptcy attorney is key.

4) Keep your broader student loan strategy in view

Bankruptcy is one lane. IDR/PSLF, consolidation strategy, default resolution, and complaint escalation can be other lanes. At K2DF, we help borrowers evaluate the whole map before making a move.

The Bottom Line

The idea that student loans are “never” dischargeable in bankruptcy is becoming harder to defend. New research suggests that borrowers who actually pursue discharge may be succeeding far more often than the public realizes — especially after the federal government’s 2022 process changes. (American Bankruptcy Law Journal)

If your loans feel unmovable, your next step isn’t panic it’s clarity. And clarity starts with knowing your options, your timelines, and your strongest path forward.

Not legal advice. If bankruptcy is on the table, talk to a qualified bankruptcy attorney for guidance based on your specific situation.