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What is the Brunner Standard for Discharging Federal Student Loans?

Christie_1The Brunner standard is a legal test used in certain circumstances to determine whether a borrower’s federal student loans can be discharged in bankruptcy. The test was established by the U.S. Supreme Court in the case of Brunner v. New York State Higher Education Services Corp. (1987).

The Brunner test has three prongs:

  1. Hardship: The borrower must prove that repaying the loans would impose an undue hardship on the borrower and their dependents.
  2. Good faith: The borrower must demonstrate that they have made a good faith effort to repay the loans.
  3. Persistence: The borrower must show that their financial hardship is likely to persist for a significant portion of the repayment period.

To meet the Brunner standard, a borrower must satisfy all three prongs. If a borrower is able to demonstrate that repaying their federal student loans would result in undue hardship, the loans may be discharged in bankruptcy. It’s important to note that discharging student loans in bankruptcy is a difficult process and may not be available in all cases. It’s recommended that you consult with a bankruptcy attorney for guidance.

As of November 2022, there is new DOJ guidance which will allow a borrower to submit an attestation as to his or her “undue hardship” along with the filing of an adversary proceeding in a bankruptcy (any chapter).  We expect this will result in many more discharges for federal loans than the Brunner standard has permitted over the years.  Even though the Brunner standard will remain unchanged, the way it is being interpreted is changing to benefit more debtors!

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