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Student Loan Bankruptcy Discharges Surge to 87%

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Created December 30, 2025

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Video Transcript

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Breaking news: Student loan borrowers are seeing a major shift in bankruptcy outcomes. Recent changes in

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Biden administration guidelines have skyrocketed the success rate of discharging student

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loans in bankruptcy to 87%, compared to just 61% in 2017 and 40% in 2007.

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A study reviewed 652 cases from October 2022 to November 2023, highlighting how

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borrowers can now better demonstrate their financial hardships. Despite over 3 million

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bankruptcy filings since 2011, few have attempted to discharge student loans,

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often considered untouchable. Borrowers in the study average $115,000 in debt,

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with some surpassing $240,000. As defaults rise, borrowers face looming wage garnishments.

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