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FAQ: Discharging A Student Loan Through Bankruptcy

October 8, 2012

As a Direct Loan servicer, Nelnet’s Partner Solutions team receives questions from the school financial aid and borrower communities on a regular basis.  In an effort to share the information and educate our school partners, we are posting to our blog some of the more relevant and well-timed questions that we receive.

Q:  Are there any circumstances in which an individual is able to discharge a student loan by filing bankruptcy?

A:  A judge will not discharge a student loan without the borrower having filed an adversary proceeding.  In that proceeding, the borrower would have to prove that he or she would not be able to maintain a minimal standard of living, that the financial hardship would continue for a long time, and that the borrower has made a “good faith” effort to repay the loan.

Do you have any servicing-related questions? Please let us know so we can help you and others in the school community who may be wondering the same thing.

Alan Ishida – Regional Director, Nelnet Partner Solutions

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