Are student loans ever discharged in a bankruptcy case?

With the increased cost of higher education, more and more Americans are becoming deep in student loan debt, with little way to repay the amount of money they have borrowed.  After hearing about the benefits of filing for bankruptcy, you may decide filing bankruptcy on student loans is an option for you.  However, in the majority of scenarios, student loans are not dischargeable in a bankruptcy.  The only way to have your student loans discharged in a bankruptcy is to show that repaying the student loans constitutes an undue hardship. 

To obtain a bankruptcy discharge of your student loans based on undue hardship you must show three things to the court. First, you must prove to the court that, based on your current income and expenses, you are unable to maintain a minimal standard of living if you are forced to continue to repay the loans.  Second, you must show your current financial situation will continue into the near future.  Lastly, you must demonstrate to the bankruptcy court that you made a good faith effort to repay the loans.  

If you show all three factors of the undue hardship exception, you may be granted a discharge or at least a partial discharge of your student loan debt.  However, it is extremely rare to have your student loans discharged in bankruptcy, partially because many repayment options exist for borrowers and Congress believes it is against public policy to discharge student loan debt in bankruptcy.