Q: Are student loans borrowed from a private lender (not the federal government) subject to the same exemptions from
bankruptcy discharge as regular student loans?
A: Private student loans may be dischargeable if certain criteria are met. The debtor must file an adversary proceeding against their creditor and meet the standards in what is called the Brunner Test. In Brunner v. NewYork State Higher Education Services Corp No. 41, Docket 87-5013 outlines the requirements, (1) that the debtor cannot maintain, based on current income and expenses, a "minimal" standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans.
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