FAQ: Discharging A Student Loan Through Bankruptcy
As a Direct Loan servicer, Nelnet’s Partner Solutions team receives questions from the school financial aid and borrower communities on a regular basis. In an effort to share the information and educate our school partners, we are posting to our blog some of the more relevant and well-timed questions that we receive.
Q: Are there any circumstances in which an individual is able to discharge a student loan by filing bankruptcy?
A: A judge will not discharge a student loan without the borrower having filed an adversary proceeding. In that proceeding, the borrower would have to prove that he or she would not be able to maintain a minimal standard of living, that the financial hardship would continue for a long time, and that the borrower has made a “good faith” effort to repay the loan.
Do you have any servicing-related questions? Please let us know so we can help you and others in the school community who may be wondering the same thing.
Alan Ishida – Regional Director, Nelnet Partner Solutions
