Student loan discharge in bankruptcy is difficult but not impossible. Recent DOJ guidance has made it significantly easier. Both the Western District of Missouri and the District of Kansas use the Brunner test. Here is what Kansas City residents need to know.
Yes, but it requires an additional step beyond a regular bankruptcy filing. Under 11 U.S.C. section 523(a)(8), student loans are presumed non-dischargeable unless you can prove that repaying them would impose an "undue hardship" on you and your dependents.
To seek discharge, you must file a separate lawsuit within your bankruptcy case called an adversary proceeding. This is a full litigation process with its own complaint, discovery, and potentially a trial.
The important thing to know: the landscape has shifted significantly since 2022. Student loan discharges are now more achievable than at any point in the past two decades.
Both the Western District of Missouri (8th Circuit) and the District of Kansas (10th Circuit) apply the Brunner test, established in Brunner v. New York State Higher Education Services Corp., 831 F.2d 395 (2d Cir. 1987). You must satisfy all three prongs:
Based on your current income and expenses, you cannot maintain a minimal standard of living for yourself and your dependents if forced to repay the student loans. This is not about maintaining your current lifestyle -- it is about basic necessities. Courts look at whether you can afford food, shelter, clothing, transportation, and basic medical care while making loan payments.
Additional circumstances exist indicating that your financial hardship is likely to persist for a significant portion of the repayment period. Courts look for factors such as chronic illness or disability, age (especially older borrowers near retirement), limited education or job skills, a history of low earnings, or other conditions that make improvement unlikely. This prong has historically been the hardest to satisfy.
You have made good-faith efforts to repay the loans. This does not necessarily mean you must have made payments. Courts consider whether you applied for income-driven repayment plans, deferments, or forbearances. Enrolling in IDR plans and making whatever payments you could demonstrates good faith, even if those payments were $0.
Note: Some circuits are moving toward a "totality of circumstances" test that is generally considered more flexible than Brunner. The 8th Circuit (which covers W.D. Mo.) has shown some openness to this approach, but Brunner remains the primary framework. The 10th Circuit (D. Kan.) applies Brunner.
In November 2022, the Department of Justice issued new guidance fundamentally changing how the federal government handles student loan discharge cases in bankruptcy:
What this means for Kansas City filers: If you have federal student loans and file an adversary proceeding, the DOJ will evaluate your case on the merits using the attestation form. If you clearly qualify under Brunner, the government may agree to discharge without a trial. This has dramatically increased the success rate and reduced the cost and complexity of student loan discharge cases.
Note: The DOJ guidance applies only to federal student loans held by the Department of Education. Private student loans (from banks, Sallie Mae/Navient, etc.) are handled differently and the lender will make its own decision about whether to contest discharge.
If discharge is not likely in your case, or you want to explore other options first, consider these alternatives:
Federal student loans offer several income-driven plans that cap monthly payments based on income and family size:
| Plan | Payment Cap | Forgiveness After |
|---|---|---|
| SAVE (formerly REPAYE) | 5-10% of discretionary income | 20-25 years |
| PAYE | 10% of discretionary income | 20 years |
| IBR | 10-15% of discretionary income | 20-25 years |
| ICR | 20% of discretionary income | 25 years |
Payments can be as low as $0/month if your income is below 225% of the poverty line (under SAVE). Check StudentAid.gov for current program details.
Even without discharge, Chapter 13 can help manage student loan debt:
Yes, but you must file a separate adversary proceeding and prove undue hardship under the Brunner test. Both W.D. Mo. and D. Kan. use this test. The 2022 DOJ guidance has made discharge significantly more achievable. Learn more at bankruptcystudentloans.org.
The Brunner test requires proving three things: (1) you cannot maintain a minimal standard of living while repaying, (2) your hardship is likely to persist, and (3) you have made good-faith repayment efforts. Both Kansas City courts use this test. Learn more at brunnertest.org.
The DOJ now uses a standardized form to evaluate cases and will recommend discharge when evidence supports it, rather than automatically opposing every case. This has increased success rates and reduced litigation costs for federal student loan discharge cases.
An adversary proceeding is a separate lawsuit filed within your bankruptcy case to determine if your student loans can be discharged. It requires a complaint, has a $350 filing fee, and may involve discovery and trial. Many cases now settle under the DOJ guidance.
Yes. Courts can discharge part of your debt -- for example, eliminating accrued interest while requiring repayment of the principal. Partial discharge has become more common under the 2022 DOJ guidance.
Alternatives include income-driven repayment plans (SAVE, PAYE, IBR), Public Service Loan Forgiveness, teacher loan forgiveness, total and permanent disability discharge, and borrower defense to repayment. Chapter 13 also places federal loans in forbearance during your plan.
Visit our dedicated resources for comprehensive guides to student loan options in bankruptcy.
Student Loan Guide Brunner Test Explained