Law Review: Iuliano, Jason Bridging the Student Loan Bankruptcy Gap

By Ed Boltz, 6 January, 2026

Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5944454

Abstract:

In November 2022, the Department of Justice and Department of Education announced sweeping reforms designed to make student loan bankruptcy discharge more accessible to struggling borrowers. Drawing upon an original (hand collected) dataset of more than six hundred adversary proceedings filed during the first year of implementation, this article presents the first empirical analysis of whether these reforms have achieved their goal and bridged the “Student Loan Bankruptcy Gap”—the chasm between those who could benefit from bankruptcy discharge and those who actually pursue it. The results are mixed but suggest the gap, although narrowed, remains wide. On the positive side, success rates have reached 87% in the post-reform period. But on the negative side, filings remain remarkably low. This article evaluates the reforms along four key metrics of success and proposes solutions to make bankruptcy relief more accessible to struggling borrowers.

Bridging the Student Loan Bankruptcy Gap: Progress — But Still Miles To Go:

Professor Jason Iuliano’s newest article, Bridging the Student Loan Bankruptcy Gap, offers something that has been sorely missing in the conversation about student-loan discharges: data rather than rumor, analysis instead of folklore, and a grounded assessment of whether the Department of Justice’s November 2022 attestation process actually changed anything.

And yes — it has.

Borrowers who file adversary proceedings are winning.

But the real problem remains: almost no one files.

It Isn’t Really the Law That’s the Problem — It’s Behavior

Across multiple articles — including:

Student Loans, Bankruptcy, and the Meaning of “Educational Benefit”
(which helped catalyze the Crocker, McDaniel, and Homaidan line of cases clarifying that not every supposed “student loan” is actually protected by §523(a)(8)), and
The Student Loan Bankruptcy Gap: Where Prof. Iuliano documented how prior to the SLAP Guidance, out of the ~250,000 student loan debtors who filed for bankruptcy, fewer than three hundred discharged their educational debt.

Iuliano has shown that the dominant myth — student loans cannot be discharged — has done more damage than §523(a)(8) itself ever could.

Lawyers stopped filing.
Clients never heard about the possibility.
Courts stopped seeing the cases — and the myth hardened.

The DOJ’s 2022 guidance tries to correct course by:

Defining clearer presumptions under Brunner
Simplifying evidence through attestation
Encouraging stipulations instead of trial by attrition

The result?

Roughly 87% success among those who actually file.

And yet filings remain anemic — proof that culture changes slower than doctrine.

Judges: Some Obstacles — But Many Quiet Allies

It must be acknowledged — there are still a few rogue judges who seem determined to block agreed student-loan discharges, even where the DOJ stipulates that undue hardship exists.

These judges, driven by an ill-conceived sense that they personally safeguard federal fiscal responsibility (which, if our system was working, would be the job of Congress), insist on second-guessing both the borrower and the government. The result is needless litigation, higher costs, and exactly the kind of access-to-justice barrier both the Biden and Trump administrations have sought to avoid.

But those judges are the exception — not the rule.

Across the country, many bankruptcy judges are doing the opposite:

encouraging Student Loan Adversary Proceedings (SLAPs)
adopting student-loan management programs
creating standardized discovery schedules
pushing user-friendly procedures rather than obstacle courses

Instead of weaponizing Brunner, they are demystifying it — and signaling clearly that debtors should bring these cases.

That matters. Culture follows procedure.

More Can Be Done— Especially on Fees

If we truly want SLAPs to become routine tools rather than heroic undertakings, we need to make them economically feasible.

Right now, many debtors simply cannot afford counsel — and many attorneys understandably hesitate to shoulder unpaid litigation risk.

One simple fix:

Allow “no-look” fees in Chapter 13 for student-loan adversaries, payable through the plan.

Treat SLAPs as a recognized service — not a boutique add-on.

If attorneys could rely on standardized compensation, more cases would be filed. More courts would see the right facts. More borrowers would receive discharges. And the Student Loan Bankruptcy Gap would actually begin to close.

This is the kind of structural tweak that aligns incentives instead of relying on heroics.

Connecting Back to “Full Discharge Ahead”

This all echoes themes discussed earlier in the review of:

Pang & Belisa / Jimenez-Dalie & Bruckner — Full Discharge Ahead

The winds are shifting:

DOJ is more reasonable
courts are less hostile
scholarship supports workable frameworks
judges increasingly support bringing the cases

The barrier now is no longer doctrinal despair — it is professional inertia.

Final Thought: Ask — Because Now You Might Receive

Iuliano’s newest article reinforces something bankruptcy practitioners cannot afford to ignore:

The discharge is no longer fantasy.
The gap persists only because most people never try.

Our task — as lawyers, judges, trustees, and educators — is to make sure that borrowers learn that relief exists, that the courthouse door is not welded shut, and that the promise of a fresh start applies to student loans as much as to everything else.

And while some still cling to the myth that protecting the Treasury means punishing borrowers forever, the better view — the bankruptcy view — remains: