Courts use different tests to evaluate whether a particular borrower has shown an undue hardship. A common test is the Brunner test which requires a showing that 1 the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans; 2 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 the debtor has made good faith efforts to repay the loans. Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 2d Cir. 1987. Not all courts use this test. Some courts will be more flexible, some less.
An effort is underway to change the discharge-ability of private student loans. “The Private Student Loan Bankruptcy Fairness Act of 2010” is running its course through committees and may come up for a vote soon.