Does Bankruptcy Clear Student Loans? What Florida Borrowers Need to Know

Maybe it was a notice that your repayment plan is ending. Maybe it was a default letter, or a statement showing a balance larger than the amount you originally borrowed. Whatever arrived, the payment no longer fits a budget already stretched by Florida rent, insurance, and groceries.

At some point, bankruptcy crosses your mind, and someone quickly tells you not to bother because student loans cannot be wiped out. Many borrowers believe it. Some keep paying what they cannot afford and fall behind on everything else, while others stop paying and end up in default.

That answer is outdated. Student loans can be discharged in bankruptcy, but only through an extra step that most filers never take. This guide explains how that step works, what Florida courts look for, and how to decide whether bankruptcy fits your situation in 2026.

Can You File Bankruptcy on Student Loans?

Yes, you can file bankruptcy on student loans, and in many cases you can have them discharged. A standard discharge, however, does not include them. Under Section 523(a)(8) of the Bankruptcy Code, most student loans are grouped with debts such as child support and certain taxes, which survive a regular Chapter 7 or Chapter 13 discharge.

Bankruptcy can clear student loans only if you ask the court separately and prove that repaying them would impose an undue hardship on you and your dependents. You make that request through an adversary proceeding, a separate lawsuit filed inside your bankruptcy case against the holder of the loan.

Researchers estimate that about 99% of people who file bankruptcy with student loans never make this request.

What Bankruptcy Can Do for Each Type of Student Loan

Your path to a discharge depends on who made your loan and who holds it today:

You can see every federal loan, its type, and its holder by logging in to studentaid.gov. A loan that does not appear there is most likely private, and the original loan agreement will name the lender.

How to Prove Undue Hardship for Student Loans

The Bankruptcy Code never defines “undue hardship.” Bankruptcy courts in Florida follow the U.S. Court of Appeals for the Eleventh Circuit, which adopted a three-part standard known as the Brunner test in 2003. You must show all three:

1. You cannot maintain a minimal standard of living while paying. After necessary expenses such as housing, food, transportation, and medical care, your income does not cover the required loan payment.
2. Your situation is likely to last. The hardship is expected to continue for a significant part of the repayment period, not just a few difficult months.
3. You made an honest effort to repay. Before filing, you tried to manage the loan, for example by making payments or contacting your servicer.

For federal loans, the way the government evaluates these three questions changed in 2022.

How the Attestation Process Works for Federal Loans

In November 2022, the U.S. Department of Justice and the Department of Education adopted a standard process for federal student loan discharge cases. Government attorneys now review a sworn form, called an attestation, and recommend discharge to the court when the facts meet the test. It works in this order:

• You file bankruptcy and an adversary proceeding asking the court to discharge your federal loans.
• You complete the attestation, listing your income, expenses, and loan history, with tax returns or pay stubs attached.
• The government reviews it with the Department of Education and recommends a full discharge, a partial discharge, or neither.
• The judge makes the final decision. The recommendation carries significant weight, but it does not bind the court.

The process also makes the second part of the test easier to meet. The government presumes your hardship will continue if any of these apply:

• You are 65 or older
• You have a disability or chronic injury that limits your ability to earn
• You have been unemployed for at least five of the last ten years
• You did not complete the degree the loan paid for
• Your loans have been in repayment status, including deferment, forbearance, or default, for at least ten years

Good faith is read broadly as well. A single payment or a forbearance request can count, and skipping an income-driven plan does not disqualify you if you have a reasonable explanation.

What the 87% Success Rate Really Means

A study by University of Utah law professor Jason Iuliano, published in the American Bankruptcy Law Journal, reviewed more than 600 cases filed in the first year of the new process. It found that 87% of borrowers who asked for a discharge received full or partial relief, up from 61% in 2017.

Two details matter before you apply that number to your own case:

• It includes partial discharges, where the court erases part of the balance and leaves an amount you can realistically repay.
• It counts only people who filed the request, many of them with an attorney and well-documented hardship.

Can Private Student Loans Be Discharged in Bankruptcy?

Private student loans come from banks, credit unions, and online lenders, and the federal attestation process does not cover them. The outcome depends on the loan itself, starting with whether it counts as a qualified education loan under federal tax law.

Private Loans That May Be Wiped Out Like Regular Debt

A private loan is qualified only if it paid for qualified higher education expenses, such as tuition, fees, books, and housing, at an eligible school where the student was enrolled at least half-time. The loan also cannot exceed the cost of attendance minus other aid.

Loans outside that definition may be discharged in a regular bankruptcy without proof of undue hardship. Examples can include:

• Loans for more than the school’s cost of attendance
• Bar exam study loans
• Loans for programs at schools not eligible for federal student aid
• Some loans paid directly to you instead of through the school’s financial aid office

Three federal appeals courts outside Florida have ruled that non-qualified loans are not automatically protected from discharge. The Eleventh Circuit, which covers Florida, has not issued a binding ruling, so each case turns on the loan documents. One clue: lenders generally report interest on qualified loans on IRS Form 1098-E, so a private loan that never produced one deserves a closer look.

Private Loans That Still Require Proof of Hardship

A qualified private loan follows the same three-part test as a federal loan. Florida bankruptcy courts apply that rule, including a 2021 Middle District of Florida decision that held a qualified private loan non-dischargeable. Two points can still work in your favor:

• Some private lenders agree to a discharge. A Florida bankruptcy judge has noted that private lenders sometimes agree once the borrower’s federal loans have been discharged on the same facts.
• Collection lawsuits have a deadline. Florida generally gives a lender five years to sue on a written contract under the statute of limitations on debt.

What Happens to Your Student Loans When You File for Bankruptcy

The moment you file, the automatic stay takes effect. While your case is open, it stops most collection activity on your student loans, including:

• Wage garnishment
• Seizure of tax refunds and federal benefits through the Treasury Offset Program
• Lawsuits and collection calls on private loans

Federal loans are generally placed in an administrative bankruptcy forbearance, so no payment is due while the case is pending. Interest, however, can keep building on both federal and private loans.

This protection carries extra weight in 2026. The Department of Education paused its own wage garnishment, and Treasury offset collections on January 16, 2026, but has not set an end date; defaulted loans become collectible again once the pause ends. For Florida’s paycheck protections, see our guide to stopping wage garnishment in Florida.

What Happens to Student Loans in Chapter 7

Chapter 7 eliminates qualifying debts such as credit card balances and medical bills, usually within four to six months. Student loans survive that discharge, but clearing your other debts can free enough income to make a reduced student loan payment manageable.

There is no deadline to request a student loan discharge. You can file the request while the case is open or reopen a closed case later. One Florida bankruptcy judge described a debtor who finished Chapter 7 in 2020, reopened his case on his own, and had almost $75,000 in student loans discharged at the end of 2025.

What Happens to Student Loans in Chapter 13

Chapter 13 reorganizes your debts into a three- to five-year payment plan. Student loans are usually treated as general unsecured debt in that plan, so the plan, not your servicer, sets what you pay during the case.

Unless the loans are discharged, the remaining balance and interest are still owed when the plan ends. While the plan is active, the codebtor stay also generally prevents a private lender from pursuing your co-signer.

The Southern District of Florida’s Student Loan Program. The bankruptcy court covering Palm Beach, Broward, St. Lucie, Martin, Indian River, and nearby counties runs a Student Loan Program for Chapter 13 debtors. Through an online portal supervised by the court, participants work out repayment options with their loan holders.

The program also lets a debtor ask the court to keep federal loans in an income-driven repayment plan during the case.

Is Bankruptcy the Right Move for Your Student Loans in 2026?

Federal borrowers also have options outside bankruptcy, including the new Repayment Assistance Plan (RAP) launched on July 1, 2026, rehabilitation for defaulted loans, and separate discharges for disability and school closures. Bankruptcy is often worth a closer look if:

• Your student loans are one part of a larger problem that includes credit cards, medical bills, or a lawsuit
• One of the hardship presumptions listed above applies to you
• A private lender is suing you or threatening to
• Even an income-driven payment leaves too little for basic expenses

If your income is likely to rise soon, or an income-driven payment fits your budget, those options may make more sense first. Our page on student loan debt in Florida covers the non-bankruptcy paths.

Talk to The Port Law Firm About Student Loans and Bankruptcy in Florida

The Port Law Firm helps Florida borrowers evaluate whether bankruptcy can reduce or eliminate their student loan debt. Our services include:

• Loan Review: Identifying which of your loans are federal, private, qualified, or potentially dischargeable as ordinary debt.
• Undue Hardship Requests: Preparing the adversary proceeding and attestation for a full or partial discharge of federal loans.
• Private Lender Negotiation: Pursuing discharge or settlement of private student loans.
• Chapter 13 Student Loan Program Guidance: Helping clients use the Southern District of Florida’s program.

Whether your loans are current, in default, or part of a case that closed years ago, the first step is a review of your loan history and finances. Bring your loan summary from studentaid.gov, any private loan agreements, and your recent tax returns to the consultation.

Contact The Port Law Firm today for a free consultation.

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