(1) Student loan borrowers deserve an oppor-
tunity to discharge debt using a fair, nation-wide 
standard for relief. 
(2) The current standard of ‘‘undue hardship’’ 
fails to provide an achievable avenue for relief of 
student loan debt requiring significant costs and a 
paperwork burden. 
(3) Student loan borrowers rarely meet the ar-
bitrary and draconian standard of ‘‘undue hard-
ship,’’ especially in jurisdictions using the ‘‘Brun-
ner’’ test, with only 0.01% successfully being dis-
charged as of 2022. 
(4) The criteria utilized in the ‘‘Brunner’’ test, 
which is used by most bankruptcy courts in the 
United States, is inconsistent with the main goal of 
bankruptcy of giving honest debtors a ‘‘fresh start,’’ 
enabling them to more fully participate and con-
tribute to the economy. 
(5) The ‘‘Brunner’’ test was developed by the 
courts decades ago when debtors could discharge 
their student loans in bankruptcy by simply waiting 
five or seven years—it should no longer be used now 
that the waiting period for discharge was eliminated 
by Congress. 
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(6) By changing the standard of hardship, Con-
gress would provide bankruptcy courts with needed 
flexibility to adopt more reasonable criteria in deter-
mining discharge standards for student loan debt. 
(7) Adopting this new ‘‘hardship’’ standard 
does not negate requirements for discharge under 
bankruptcy proceedings like means testing, disclo-
sure requirements, and exemption limitations, secur-
ing bankruptcy’s integrity and benefitting both debt-
ors and creditors who have an increased opportunity 
for repayment. 
(8) As of June 2025, around six million bor-
rowers of Federal student loans are passed due by 
at least 90 days. 
(9) A majority of borrowers with 90 days or 
more past due student loans as of June 2025 could 
move into default by September 2025. 
(10) Millions of student loan borrowers are fac-
ing significant credit score declines making it more 
expensive or difficult to get necessary insurance, 
loans, and credit cards. 
(11) The vast majority of debtors seeking bank-
ruptcy discharges for student loans never obtained 
degrees or got degrees that have not enabled them 
to secure better employment or have a higher earn-
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ing potential as predicted when Congress adopted 
the ‘‘undue hardship’’ standard. 
(12) According to a Duke Law Journal article, 
between 2011 and 2019, less than 0.1 percent of ap-
plications made by student loan debtors in bank-
ruptcy court seeking a discharge of student loan 
debt were successful, largely because attorneys dis-
courage their clients from seeking an adversary pro-
ceeding on the belief that it is too hard to meet the 
undue hardship standard. 
(13) Each year, less than one percent of the ap-
proximately 250,000 people who file for bankruptcy 
seek to discharge student loan debt based on ‘‘undue 
hardship,’’ a mere fraction of the nearly 43 million 
people who have Federal student loan debt. 
(14) Between November 2022 and September 
2024, approximately 2,500 people sought to dis-
charge student loan debt through bankruptcy. 
(15) The Department of Education (Depart-
ment) recently reported that twenty percent of bor-
rowers are in default and another four million are 
between three and six months behind on their pay-
ments. The Department estimates that as many as 
10 million borrowers could be in default within a few 
months. 
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(16) There is little evidence of debtors abusing 
the bankruptcy system by seeking unfair discharges 
of student loan obligations, a concern raised by Con-
gress when it adopted the ‘‘undue hardship’’ stand-
ard. 
(17) The concerns of abuse were addressed and 
minimized with the passage in 2005 of the Bank-
ruptcy Abuse Prevention and Consumer Protection 
Act with the enactment of a rigorous Means Test to 
evaluate debtors’ ability to repay debts. 
(18) Student loan debt owed by Americans who 
file for bankruptcy with student loans is often never 
paid, whereas bankruptcy proceedings provide an op-
portunity to address this reality. 
(19) With the restart of student loan collec-
tions, the number of borrowers with student loan 
debt is expected to rise. The change to a ‘‘hardship’’ 
standard will facilitate fair and appropriate dis-
charges and repayment plans. 
SEC. 3. AMENDMENT 11. 
Section 523(a)(8) of title 11, United States Code, is 
amended by striking ‘‘undue’’. 
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SEC. 4. APPLICATION OF AMENDMENT. 
The amendment made by this Act shall apply with 
respect to cases commenced before, on, and after the date 
of the enactment of this Act. 
Æ 
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