What is the student loan bankruptcy success rate under the Justice Department's process?

Why was the success rate so low before the process began?

The law sets a high bar. Student loans are generally not discharged in bankruptcy unless repaying them would impose an undue hardship on the debtor and the debtor's dependents, and the borrower has to prove that in a separate lawsuit inside the bankruptcy case.3 2

When the Justice Department announced the process in November 2022, it said Congress had set a higher bar for student loans than for other debt and that the bankruptcy judge still makes the final decision. It also said the agencies would assess how well the guidance worked after the first year, which is where the reports below come from.4

Few borrowers tried. The guidance itself says some were put off by the historically low chance of success, by the mistaken belief that student loans cannot be discharged, and by the cost and intrusiveness of the lawsuit.5

What has the government reported?

The process began in November 2022. A borrower who files a lawsuit to discharge a federal student loan fills out an attestation form, and the Justice Department reviews it with the Department of Education and decides whether to recommend a full or partial discharge.2

There are two reports on how that has gone, one after the first year and one about eight months later. Both come from the Justice Department, working with the Department of Education.6 1

Where do the numbers come from?

From the government's own surveys. The Justice Department surveyed all 94 U.S. Attorneys' Offices and collected input from consumer law groups, including the National Association of Consumer Bankruptcy Attorneys.1

That makes the figures an agency's account of its own program. Both reports now sit in the Justice Department's archive, under a notice that archived information may be outdated.6 1

What do the numbers show?

Use of the process grew. The second report counted 588 new cases in six months, which it described as a 36% increase from the prior six-month period.1

The government was not fighting the decided cases. The first report said that in 99% of the cases with a court order or judgment, the government had recommended the discharge the court granted. That fits the guidance, which tells government attorneys to agree to the facts showing undue hardship and recommend discharge when three conditions are met.6 5

Courts took notice as well. The Justice Department reported that multiple bankruptcy courts adopted procedures built around the process.1

What do the numbers not show?

The limits matter more than the headline figure.

• They are not a success rate for everyone with student loans. The percentages count only cases that were filed and then decided by a court. A borrower who never filed is not in them.1
• They do not separate full from partial discharges. The reports group the two together, and a partial discharge leaves part of the debt to be repaid.1 5
• They do not cover private student loans. The process is for federal student loan discharge cases, so a private loan case is outside these figures.2
• They do not decide your case. The government's position does not bind the bankruptcy court, and the debtor keeps the burden of proof on every element of the claim.5
• They are dated. The most recent figures run through March 2024.1

Is the process still in place?

The U.S. Trustee Program's Student Loan Guidance page, updated March 17, 2026, still lists the 2022 guidance and an attestation form dated May 2025.7

The Department of Education has also told federal loan holders they may follow the Justice Department's November 2022 process when responding to undue hardship claims.8

Agency policy can change, so check the U.S. Trustee Program's page or ask a lawyer whether the process is still being used in your district before you rely on it.5

What does this mean for your own case?

Your result depends on your facts. The government looks at three things: whether you can pay now, whether that is likely to continue, and whether you made good faith efforts to repay.2

The process only starts if someone files the lawsuit. A student loan discharge requires a separate adversary proceeding inside a bankruptcy case, and the attestation form comes after that proceeding begins.2 5

The guidance itself is an internal Justice Department policy. It does not create rights a borrower can enforce, which is one more reason to treat the published figures as background and not as a forecast.5