Available at: https://scholarship.law.stjohns.edu/lawreview/vol99/iss3/7/
Abstract:
Part I of this Note provides background on the student loan crisis and the history of the nondischargeability of student loan debt. Part II of this Note examines the DOJ’s Guidance on litigating “undue hardship,” the intra-circuit criticism of the Brunner framework, and the need for harmony in understanding “undue hardship” in light of other authority governing student loans. Part III of this Note argues for a shift in the analysis of “undue hardship” based on practical guidance from the DOJ, the DOE, and the courts. This shift focuses on the subjectivities of each bankruptcy case and the need for harmony in light of constantly evolving policy on student loan forgiveness. Finally, this Note will address concerns about the reliability and predictability of a more discretionary, subjective approach to student loan dischargeability.
Defining the Undefined: Reimagining “Undue Hardship”
A recent student note by C. Sam D’Alba in the St. John’s Law Review takes aim at one of the most stubborn features of modern bankruptcy law: the elusive meaning of “undue hardship” under 11 U.S.C. § 523(a)(8).
The article surveys the history of student loan nondischargeability, critiques the dominance of the Brunner test, and argues that courts should move toward a more flexible framework informed by the 2022 Department of Justice and Department of Education guidance on student loan discharge litigation.
The Student Loan Exception to Discharge
The Note begins with the now-familiar backdrop: the explosion of student loan debt. More than 40 million Americans collectively owe roughly $1.8 trillion, making student loans one of the largest categories of consumer debt in the United States.
Unlike most unsecured obligations, student loans are presumptively nondischargeable in bankruptcy under § 523(a)(8). Discharge is permitted only if repayment would impose an “undue hardship” on the debtor and dependents—a phrase Congress never defined.
That omission left courts to fill the gap. And most circuits did so by adopting the three-part test first articulated in Brunner v. New York State Higher Education Services Corp. (2d Cir. 1987).
Under Brunner, a debtor must prove:
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They cannot maintain a minimal standard of living if forced to repay the loan.
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Their financial circumstances are likely to persist for a significant portion of the repayment period.
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They have made good-faith efforts to repay.
In practice, the second prong often morphed into the notorious requirement that the debtor demonstrate a “certainty of hopelessness.”
The Circuit Split
The Note highlights that not all courts have embraced this strict approach.
The First and Eighth Circuits apply a “totality-of-the-circumstances” test that looks more broadly at the debtor’s finances and situation without rigid elements. But most circuits—including the Fourth Circuit—continue to apply Brunner.
This dominance matters, because under the traditional interpretation of Brunner, failure to satisfy any one of the three prongs ends the analysis and bars discharge.
DOJ and DOE Guidance: A Quiet Shift
One of the most significant developments discussed in the article is the 2022 DOJ/DOE guidance on student loan discharge litigation.
That guidance encourages government attorneys to stipulate to undue hardship in appropriate cases and establishes rebuttable presumptions that repayment will remain impossible when certain factors are present, including:
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Age 65 or older
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Long-term disability
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Prolonged unemployment
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Failure to complete the educational program
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Loans that have been in repayment status for ten years or more
The results have been dramatic. Since the guidance was implemented, the overwhelming majority of litigated cases—nearly 98% in some reported data—have resulted in partial or full relief.
Criticism of Brunner
The Note also catalogues growing judicial skepticism toward the Brunner test itself.
Bankruptcy courts applying it have called the doctrine:
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“a relic of times long gone,”
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“without textual foundation,” and
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burdened by layers of “judicial gloss.”
Even courts that continue to apply Brunner have acknowledged that phrases like “certainty of hopelessness” appear nowhere in the statute and were added later by judicial interpretation.
A Proposed Middle Ground
Rather than abandoning structure entirely, the author proposes a hybrid approach:
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Retain the first two Brunner prongs regarding present inability to pay and the persistence of that inability.
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Adopt DOJ-style presumptions to guide the future-hardship inquiry.
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Treat “good faith” as relevant but not dispositive, creating a safe harbor if the debtor made any meaningful effort to address repayment.
The goal is to balance administrability and fairness while aligning bankruptcy law with modern student-loan policy.
Commentary
This article arrives at a moment when the law of student loan discharge is already evolving—not through Congress, but through executive policy and litigation practice.
For decades, student loan discharge was widely viewed as a near impossibility. Many borrowers—and, frankly, many lawyers—believed the debt was simply non-dischargeable. That belief was reinforced by the harsh rhetoric surrounding Brunner, particularly the “certainty of hopelessness” language.
But the DOJ/DOE guidance has quietly undermined that assumption.
By encouraging government attorneys to stipulate to discharge when the facts support it, the federal government has effectively relaxed the practical application of Brunner without requiring courts to formally abandon the test.
For consumer bankruptcy practitioners, that shift is significant. Student loan adversary proceedings that once seemed futile now have real traction.
Still, the Note correctly identifies the deeper doctrinal problem: Brunner was built for a very different era of student lending—when loans were smaller, repayment periods shorter, and nondischargeability applied only for a limited time.
Today’s system bears little resemblance to that world.
Congress removed the temporal limitation in 1998, leaving debtors permanently subject to the undue-hardship standard. Yet courts continue to apply a framework shaped by fears of recent graduates racing to bankruptcy court immediately after finishing school.
That historical mismatch helps explain why the doctrine often feels disconnected from modern student-loan realities.
The proposed hybrid framework—combining Brunner’s structure with DOJ-style presumptions and a softer view of good faith—may represent a practical way forward. It preserves predictability while allowing courts to acknowledge the systemic dysfunction of the student loan system.
In the end, however, the real problem may not be doctrinal at all.
The persistent uncertainty surrounding “undue hardship” is largely the result of Congress’s decision to leave the phrase undefined. Until Congress revisits § 523(a)(8), bankruptcy courts will continue to wrestle with a standard that is at once central to the statute and fundamentally ambiguous.
And in that sense, the title of the article captures the challenge perfectly: bankruptcy courts are still trying to define the undefined.
To read a copy of the transcript, please see:
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