Effective October 8, 1998, your obligation to repay Title IV, HEA student loan and grant liabilities can no longer be canceled (discharged) due to bankruptcy, unless you can successfully prove that repayment of the debt would cause "undue hardship" as defined by case law in your jurisdiction. Previously, student loan and grant liabilities could only be canceled (discharged) due to bankruptcy under certain conditions which, in general, depended on the amount of time between the date on which a loan or grant liability has been due or the date that the bankruptcy was filed, as well as undue hardship.

Effective May 28, 1991 and prior to October 8, 1998, a loan or grant liability was discharged by entry of a general discharge order if the first payment came due on the debt at least 7 years before the bankruptcy was filed. Prior to 1991 amendments, only five years was required. Any grace periods, forbearance, or deferment must be subtracted from the time elapsed between the first payment due date and the filing date when calculating time in repayment. Debts outstanding for less than the required seven year period could be discharged only if the court made an express finding that the repayment of the debt would place an "undue hardship" on the borrower. These non-dischargeability requirements apply to educational loans received by both student borrowers and by parent borrowers (PLUS Loans), and apply to loans received by any kind of borrower to pay off prior loans (Consolidation Loans). Dischargeability of these types of debts is governed by 11 U.S.C. 523 (a)(8). In order to determine the dischargeability of a loan, the servicing agency needs the following three pieces of information from you or your attorney:

Notice of First Meeting of Creditors;
List of Creditors (Schedule A-3); and
the Final Discharge Order