Introduction — Why this guidance matters for Los Angeles borrowers
If you carry federal student loans and are struggling to pay, the Justice Department (DOJ) and the U.S. Department of Education (ED) finalized a coordinated process (announced initially in November 2022 and actively implemented and reviewed through 2024–2025) meant to make bankruptcy discharges for qualifying federal student loans more consistent, transparent, and accessible. This guidance changes how federal attorneys and the ED evaluate "undue hardship" claims and adds a borrower attestation and data-driven process intended to reduce needless litigation and speed relief where discharge is appropriate.
For Los Angeles residents, the guidance can affect whether federal Direct Loans (Title IV loans held by ED) will be recommended by DOJ attorneys for discharge in bankruptcy adversary proceedings — a practical route to meaningful relief for some borrowers. This article explains the key elements of the guidance, which loans are affected, practical steps to take in Los Angeles courts, and local resources.
What the DOJ & ED guidance actually says (plain English)
How the guidance frames "undue hardship": the departments direct attorneys to evaluate three core elements when considering recommending discharge — (1) the debtor currently lacks the ability to repay the loan while maintaining a minimal standard of living, (2) that lack of ability is likely to persist into the future, and (3) the debtor has acted in good faith in attempts to repay. When those elements are supported by the record and the ED data/attestation, DOJ attorneys may recommend discharge to a bankruptcy judge.
Key process changes and tools:
- Borrower attestation form: the guidance introduces a standardized attestation borrowers complete describing income, expenses, payments, and efforts to obtain alternatives (IDR, consolidation, rehabilitation). ED data will supplement the attestation.
- Streamlined fact-gathering: DOJ attorneys are directed to rely on clear, objective factors and ED records in many cases rather than opening broad discovery. This is intended to reduce cost and delay for qualifying borrowers.
- Which loans are in scope: the guidance focuses on federal Title IV loans (e.g., Direct Loans and Direct Consolidation Loans held by ED). Private student loans generally remain nondischargeable under current law.
Bottom line: the guidance does not change statutory law — courts still determine undue hardship — but it creates a predictable, government-backed pathway that has already produced increased recommendations for discharge and higher rates of relief in many districts.
Practical steps for Los Angeles borrowers (what to do now)
If you live in Los Angeles County and think you may qualify for a student‑loan discharge under the guidance, follow these steps:
- Confirm your loan type and holder. The process and ED cooperation primarily help borrowers with federal Title IV loans owned by ED (Direct Loans). Private loans are rarely dischargeable; get a copy of your promissory note and the current loan holder statement.
- Consult a bankruptcy attorney experienced with student‑loan adversary proceedings. A local attorney can assess whether Chapter 7 or Chapter 13 plus an adversary complaint makes sense for your situation and can help prepare the attestation and supporting evidence.
- File bankruptcy and the adversary complaint (if appropriate). To pursue a discharge you generally file a consumer bankruptcy (Chapter 7 or Chapter 13) and then file an adversary complaint asking the court to discharge the student loans (or to rule a portion nondischargeable). Under the DOJ/ED process, you will include the attestation and ED’s records will be considered as part of the review.
- Gather evidence to show the three prongs: current inability to pay (budget, pay stubs, bank statements), likelihood hardship will persist (medical records, employability evidence, age, education and job prospects), and good faith (payment history, attempts at IDR enrollment, outreach to loan servicers). Courts in the Ninth Circuit (which covers Los Angeles) have sometimes applied a more flexible test when evaluating undue hardship, so tailored local arguments matter.
- Use local resources: Legal aid organizations in LA, bankruptcy clinics at law schools, and nonprofit counsel can help with document preparation or representation if you cannot afford private counsel.
What to expect in Los Angeles court: judges still make final determinations, but the DOJ's practice of recommending discharge where the guidance's conditions are met has increased the number of successful outcomes. Timelines vary: adversary proceedings often add weeks to months to a consumer bankruptcy case depending on scheduling.
Implications, risks, and next steps
Implications: the coordinated DOJ/ED approach is a meaningful, practical improvement for many struggling borrowers: it standardizes review, encourages stipulations in clear cases, and reduces adversarial discovery where ED records and a borrower attestation support undue hardship. This has produced measurable increases in recommended and judicial discharges in multiple districts. However, the guidance does not relieve every borrower — each case remains fact‑specific and judges retain final authority.
Risks and caveats: (1) the guidance applies to federal Title IV loans held by ED — private loans are usually excluded; (2) good documentation is essential — incomplete or inconsistent attestation can hurt your case; and (3) the guidance can be revised or interpreted differently over time, so rely on up‑to‑date local legal advice.
Where to get help in Los Angeles
- Contact a bankruptcy attorney with student‑loan experience — many offer free consultations.
- Check nonprofit clinics and legal aid: Neighborhood Legal Services, Bet Tzedek, Legal Aid Foundation of Los Angeles, and law school clinics often assist low‑income filers.
- Track DOJ/ED updates and local court procedures: DOJ press releases, ED/FSA guidance, and the Central District of California bankruptcy court website will post local practice rules and forms.
Final thought: If you’re a Los Angeles borrower burdened by federal student loans, the 2022–2025 DOJ/ED guidance creates a clearer route to relief — but success depends on correct procedure, thorough documentation, and timely legal advice. Start by confirming whether your loans are Title IV loans, gather the evidence tied to the three undue‑hardship elements, and consult counsel about filing an adversary complaint in the Central District of California.