In a recent Bloomberg article published August 5, 2025, the economic alarm bells started ringing loud and clear: more Americans are behind on their student loans than at any time in over two decades. In the second quarter of 2025 alone, 12.9% of all student loans became 90 days or more delinquent - a record high since the New York Federal Reserve began tracking the data 21 years ago.
Total household debt also reached a staggering $18.39 trillion, and while credit card and auto loan delinquencies ticked upward, student loan debt is by far the biggest contributor to the surge in past-due obligations.
It’s a wake-up call. But not one without hope.
If you’re drowning in student loan debt, you’re not alone and contrary to popular belief, you are not powerless. Thanks to major federal policy changes in late 2022, Americans can absolutely eliminate their student debt through bankruptcy.
The Myth That Student Loans Can't Be Discharged
Let’s make one thing perfectly clear: the belief that student loans cannot be discharged in bankruptcy is a myth. That may have been true in practice for decades, but the law never actually made them impossible to discharge. It just made the process confusing, arbitrary, and expensive.
That changed with new guidance jointly issued by the Department of Justice and Department of Education in November 2022. The new guidelines streamlined the process for determining when federal student loans can be discharged in bankruptcy. In the past, you needed to go through a grueling lawsuit, spend thousands on legal fees, and still had to prove an “undue hardship” standard with no clear definition. Now, under the 2022 guidance, the DOJ will stipulate to discharge, meaning the government won’t oppose your request, and the Court will grant the discharge. And since it’s a court order, it can’t be taken away like previous forms of student loan relief.
This is a game-changer. At DebtStoppers, we’ve helped more people discharge their student loans through bankruptcy than any other firm. We’ve seen firsthand how transformative this policy has been. So if you’re behind on student loan payments or terrified you will be, you should talk to a bankruptcy attorney right away.
What You Need to Qualify: The DOJ's Criteria
Under the new policy, the Department of Justice will agree to forgive your federal student loans if you can show three things:
1. You can’t currently afford to repay the loans.
This means your expenses exceed your income. It doesn’t require you to be unemployed or destitute, just that you don’t have the financial means to repay your loans while maintaining a decent standard of living. Many working families fall into this category.
2. Your financial situation is unlikely to change.
Here’s where the biggest myth starts to break down. If you’ve been out of school for at least 10 years, the DOJ will presume your financial situation is unlikely to improve. That’s right -the number one factor in student loan discharge cases is how long ago you went to school.
Most people considering bankruptcy are already in their 30s, 40s, or even older. That means they automatically meet this requirement. It doesn’t matter if you went to community college, technical school, or a private university. If it’s been 10 years since you last attended, you qualify under this prong - no further proof needed.
3. You’ve made a good-faith effort to repay.
This is easier to show than people think. If you’ve ever made a payment, applied for deferment, enrolled in an income-driven repayment plan (even if it was later canceled), or simply tried to communicate with your loan servicer, it counts. This prong is about your intent—not your success.
Still in Effect in 2025
Unlike previous student loan forgiveness programs like student loan forgiveness 2022, the Trump administration has not rolled back this guidance and it remains a vital tool for individuals seeking meaningful debt relief.
If you’ve been out of school for 10+ years and can’t reasonably pay your student loans, you are likely a candidate for a discharge. At DebtStoppers, our track record is unmatched, and we’ve seen hundreds of thousands of dollars in student debt wiped out, completely and permanently, for our clients.
Who Should Be Taking Action Right Now?
Even if you haven’t been out of school for 10 years, If any one of the following apply to you, it’s time to speak with a bankruptcy attorney who understands student loan discharge:
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You’ve been out of school for 10 years or more
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You have a disability for affects your income
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You have been out of work for 5 of the last 10 years
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You are over 65
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You never graduated or received the degree for which you took out your loan.
Don’t Let a Misinformed Attorney Misguide You
One of the most tragic realities we see is when people are misinformed by their own attorneys. Many lawyers still believe that student loans aren’t dischargeable. That’s false, and if you hear that from someone, get a second opinion.
If you talk to a bankruptcy attorney and they tell you they can't help you with student loans, talk to another attorney! In fact, talk to us at DebtStoppers. We will tell you right away whether your case qualifies under the new rules. We don’t waste your time, and we don’t overcharge. We believe in real solutions for real people.
Debt Relief Student Loans: Time Is of the Essence
The spike in student loan delinquencies is not surprising. Payments resumed in late 2023 and enforcement has started as of August 1st. Many people applied for the new SAVE plan, but the program has failed in the face of legal challenges.
That’s why the courtroom remains your best option for guaranteed relief. When we file your bankruptcy case, we assess your full financial picture - not just your credit card or medical debt, but your student debt relief options as well. If you qualify, we file an adversary proceeding alongside your bankruptcy petition. In many cases, the DOJ will agree to discharge your loans without even needing a trial.
Student loans are not just a financial burden, they’re a public health issue, a mental health crisis, and a major factor in generational inequality. We know. We’ve seen what it does to families. But we’ve also seen what happens when those families get relief. We’ve seen the joy when someone checks their loan balance and sees $0.00 for the first time in 20 years. We’ve seen parents sleep better knowing they’re not passing on this burden to their children. You don’t have to be stuck. You don’t have to live in fear of default, garnishment, or lifelong debt.
Final Word: Take the First Step
DebtStoppers is the nation’s largest consumer bankruptcy firm and we’ve helped more people discharge student loans than anyone else. The rules have changed. The courts are on your side. And we’re here to fight for you.
If you’re ready to explore your options for student debt relief, reach out to us. The consultation is free. The relief is real.
Want to learn more? Better call DebtStoppers.
