The student loan delinquency rate has hit nearly 25%, according to a 2026 report by The Century Foundation. But borrowers looking to discharge their loans in bankruptcy may be in a better position than they realize.
In 2022, the Departments of Justice (DOJ) and Education (DOE) streamlined the process for federal student loan discharges in bankruptcy proceedings, allowing borrowers to submit a written attestation of their financial status rather than undergo the usual lengthy legal process.
The results have been dramatic. An analysis in the American Bankruptcy Law Journal (ABLJ) by University of Utah law professor Jason Iuliani found that, in 2023, borrowers who attempted to discharge their federal student loans in bankruptcy succeeded…