Certain types of student or educational loans or debt are not generally dischargeable in bankruptcy unless the debtor can show an "undue hardship on the debtor and the debtor's dependents." The case law generally interprets this as a very high standard.

The Bankruptcy Code provides for the nondischargeability of any

• debt for an educational benefit overpayment or loan
• made, insured or guaranteed by a governmental unit or made under any program funded in whole or in part by a governmental unit or nonprofit institution
• or for an obligation to repay funds received as an education benefit, scholarship, or stipend
• unless exception such debt from discharge will impose an "undue hardship" on the debtor and the debtor's dependents

Generally the three-part Brunner test is used as to whether there is an "undue hardship." Under the Brunner test, the debtor must establish by a preponderance of the evidence that

• the debtor cannot maintain based on current income and expenses, a "minimal" standard of living for himself, his dependents if forced to repay the loans
• additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the student loan repayment period
• the debtor has made good faith efforts to repay the loans

In meeting the Brunner test, the courts generally require more than temporary financial adversity, but typically stop short of utter hopelessness. The debtor is not required to live in poverty, but is also not entitled to maintain his previous standard of living.  The court may consider any available restructuring of student loan debt that would ease the debtor's repayment obligations. Courts suggest that to meet to second prong of the Brunner test, the debtor will typically be ill, disabled, lacking usable job skills, or responsible for a large number of dependants and the fact that a debtor has a low-paying job without much upside earning potential is not enough to satisfy this prong of the Brunner test.