Introduction — Why the Undue Hardship Standard Matters Now
For many debtors, the difference between keeping federal student loans and obtaining a partial or complete discharge in bankruptcy comes down to how a court (and the government) applies the "undue hardship" standard. Since Congress left "undue hardship" undefined in 11 U.S.C. § 523(a)(8), courts developed competing approaches — most famously the three‑part Brunner test — and practice has varied across jurisdictions. In November 2022 the Department of Justice (DOJ) and Department of Education (ED) issued joint guidance to standardize how DOJ attorneys evaluate federal student‑loan discharge requests; that process was updated and publicly tracked through at least February 6, 2025.
This article explains the Brunner test and the totality‑of‑the‑circumstances approach, summarizes the DOJ/ED guidance and its practical effects, and offers immediate, practical steps for California (Los Angeles) borrowers considering an undue‑hardship adversary proceeding or settlement discussions. Where helpful, we flag the new attestation and data tools the agencies are using to streamline decisions.
Comparing the Tests: Brunner vs. Totality of the Circumstances vs. DOJ/ED Guidance
Below is a focused comparison of the three approaches you are most likely to encounter in bankruptcy practice today.
| Approach | Key Criteria | Practical Effect |
|---|---|---|
| Brunner (most common) | Three prongs: (1) inability to maintain a minimal standard of living if forced to repay; (2) additional circumstances indicating that the inability will persist for a significant portion of the repayment period; (3) good‑faith efforts to repay. Origin: Brunner v. NY State Higher Educ. Servs. Corp., 831 F.2d 395 (2d Cir. 1987). | Strict; debtor must satisfy every prong. Frequently cited by courts and still the dominant test in many circuits. |
| Totality of the Circumstances | Flexible, multi‑factor inquiry: court weighs all relevant facts (income, health, age, dependents, employment prospects, debts) rather than requiring each specific showing. | More discretionary; can favor debtors in jurisdictions or judges who view undue hardship holistically, but outcomes vary. |
| DOJ/ED Joint Guidance (process‑oriented) | Focuses DOJ recommendations on three practical conditions: (1) debtor presently lacks ability to repay while maintaining a minimal standard of living (often measured against IRS Collection Financial Standards); (2) that inability is likely to persist; (3) debtor acted in good faith. The guidance uses a borrower attestation form and ED data to streamline fact‑gathering. | Designed to increase consistency and reduce burdens on borrowers and government attorneys — DOJ will recommend discharge in appropriate federal‑loan cases that meet objective criteria. Guidance applies to federal loans and to DOJ practice, not private lenders. |
In short: Brunner remains a controlling doctrinal test in many circuits; totality gives courts more flexibility; and the DOJ/ED guidance operationalizes certain objective metrics and an attestation process so that federal‑loan discharge recommendations are more predictable and less invasive for borrowers.
Practical Steps for Los Angeles Borrowers & What to Expect
- Confirm loan type and holder. The DOJ/ED guidance applies to federal student loans; private loans are not covered by the agencies’ attestation process and remain subject to traditional court analysis or private‑holder positions. If your loans are federal, ED data may speed the review.
- Prepare accurate financial documentation and the attestation. DOJ/ED guidance encourages use of objective standards (for example, IRS Collection Financial Standards) and a borrower‑completed attestation to simplify fact‑finding. Use these tools to present a clear picture of current income, mandatory expenses, and future prospects.
- Evaluate jurisdictional posture. If your bankruptcy court or circuit traditionally applies Brunner, counsel must address each Brunner prong in evidence; in courts that favor a totality approach, emphasize compelling holistic factors (disability, prolonged unemployment, catastrophic medical expenses). Local practice and judge tendencies matter.
- Consider negotiation and settlement early. DOJ/ED’s guidance was designed to make recommendations more consistent and to facilitate resolution; DOJ attorneys may recommend either full or partial discharge depending on the facts. Where DOJ does not support discharge, settlement with private holders may still be possible.
- Watch legislative and regulatory changes. Congress remains active on student‑loan bankruptcy reform (for example, bills introduced in 2025 would change the statutory standard). If Congress amends § 523(a)(8) or enacts new law, the legal landscape could shift significantly. Keep deadlines and statutory text in mind when deciding whether to file now or wait.
Conclusion
The landscape for undue‑hardship discharges has become more navigable for federal student‑loan borrowers because DOJ and ED have provided process guidance, objective metrics, and an attestation pathway intended to reduce invasiveness and increase consistency. That said, the legal test applied in court still depends on jurisdiction and the specific facts of each case — and private loans remain outside the federal attestation process. Consult a bankruptcy attorney familiar with Los Angeles practice to (1) determine which test a local judge is likely to apply, (2) assemble documentation that aligns with DOJ/ED attestation items, and (3) decide whether to pursue an adversary discharge, negotiate a settlement, or use alternative debt relief options.
Need help evaluating your options in Los Angeles? Our office can review your loan types, copy relevant pay histories and ED records, prepare a borrower attestation, and help craft the evidence package most likely to satisfy the standard your court applies. Contact a local attorney for a case‑specific strategy session.