The Bottom Line
The Brunner test requires you to prove three things: you cannot pay now, your situation is unlikely to improve, and you have tried in good faith to repay. Most circuits use this test, but courts are applying it with increasing flexibility. The "certainty of hopelessness" era is fading.
Where the Brunner Test Came From
In 1987, Marie Brunner filed for Chapter 7 bankruptcy just months after graduating from college. She had $9,250 in student loans and had never made a single payment. The Second Circuit Court of Appeals ruled against her in a brief, unpublished opinion -- Brunner v. New York State Higher Education Services Corp., 831 F.2d 395 (2d Cir. 1987) -- establishing a three-part test for determining "undue hardship."
What makes this remarkable is how far-reaching this short opinion became. Despite being just a few paragraphs long, the Brunner framework was adopted by circuit after circuit until it became the dominant standard across the country. Legal scholars have called it one of the most influential unpublished opinions in American law.
The test was designed for a specific situation: a recent graduate who had never tried to repay. Over the decades, courts stretched it far beyond that context, applying it to middle-aged workers with chronic illnesses, retirees on fixed incomes, and veterans with disabilities. Only recently have courts and the Department of Justice begun pushing back against this rigid application.
The Three Prongs Explained
Prong 1: Current Inability to Pay
What it requires
Based on your current income and expenses, you cannot maintain a minimal standard of living for yourself and your dependents if forced to repay the student loans.
This is the most straightforward prong. The court looks at your budget: income on one side, necessary expenses on the other. If there is nothing left after covering basic needs -- food, housing, utilities, transportation, medical care -- then you satisfy this element.
"Minimal standard of living" does not mean poverty-level. Courts have recognized that debtors are entitled to more than bare survival. You do not need to give up a modest car, basic cell phone, or reasonable housing to satisfy this prong. However, courts will scrutinize luxury spending, and lifestyle choices that appear extravagant will hurt your case.
Evidence That Helps
- Tax returns -- at least 3 years showing income levels
- Pay stubs or proof of current earnings
- Monthly budget with documentation for each expense
- Medical bills and insurance costs
- Childcare expenses and dependent documentation
- Housing costs relative to your area (courts compare to local norms)
Common mistake: Some debtors voluntarily reduce their income (cutting hours, taking a lower-paying job) before filing. Courts view this negatively. Your income should reflect your genuine earning capacity, not a strategic reduction.
Prong 2: Persistence of Hardship
What it requires
Additional circumstances exist indicating that your financial situation is likely to persist for a significant portion of the repayment period.
This is historically the hardest prong. Courts want to see that your inability to pay is not temporary -- that something about your situation makes it unlikely you will ever be able to repay the loans comfortably.
In the worst applications of Brunner, courts demanded a "certainty of hopelessness" -- essentially requiring proof that the debtor would never earn enough to repay. This made discharge virtually impossible for anyone under retirement age. The debtor with a chronic illness could be denied because they might recover. The debtor with no degree could be denied because they might get one someday.
That extreme reading is losing ground. Many courts now apply a "more likely than not" standard: is it more likely than not that your financial difficulties will continue for a significant portion of the repayment period? This is a substantial improvement for debtors.
Factors Courts Consider
- Age -- older debtors have less time for income growth
- Health conditions -- chronic illness, disability, or mental health issues
- Education and skills -- limited credentials or obsolete training
- Employment history -- long-term unemployment or underemployment patterns
- Dependents -- children, elderly parents, disabled family members
- Industry outlook -- whether your field is growing or declining
- Criminal record -- documented barriers to employment
- Maximized earning potential -- already working full time in your field
Key development: Courts are increasingly recognizing that income-driven repayment plans with 20-25 year horizons essentially prove persistence. If the government's own calculator says you will be in an income-driven plan for decades, that supports the persistence prong.
Prong 3: Good Faith Effort to Repay
What it requires
You have made good-faith efforts to repay the student loans.
This prong asks whether you have done what a reasonable person in your situation would do to manage the debt. Courts do not expect you to make payments you cannot afford. They want to see that you engaged with the system in good faith.
Good faith does not require perfection. It means you tried. You applied for income-driven repayment. You contacted your servicer when you fell behind. You did not take out the loans with the intention of filing bankruptcy immediately. You explored your options before seeking discharge.
Actions That Demonstrate Good Faith
- Applied for income-driven repayment (IBR, PAYE, REPAYE, or SAVE)
- Made payments when able -- even small or sporadic payments count
- Sought deferments or forbearances during financial hardship
- Contacted the loan servicer to discuss options
- Attempted to maximize income through employment, training, or education
- Minimized unnecessary expenses in your budget
- Did not live extravagantly while claiming inability to pay
Actions That Undermine Good Faith
- Filing for bankruptcy immediately after graduation with no attempt to repay
- Refusing to apply for income-driven repayment plans
- Making large discretionary purchases while claiming poverty
- Voluntarily reducing income to appear unable to pay
- Never contacting the servicer or responding to collection attempts
Which Circuits Use the Brunner Test
| Circuit | Test Used | Notable Trend |
|---|---|---|
| 1st Circuit | Brunner | Moderate application |
| 2nd Circuit | Brunner (origin) | Where the test began; some flexibility emerging |
| 3rd Circuit | Brunner | Strict historically; softening post-DOJ guidance |
| 4th Circuit | Brunner | Mixed application across districts |
| 5th Circuit | Brunner | Generally strict |
| 6th Circuit | Brunner | Some courts apply flexibly |
| 7th Circuit | Brunner | Moderate; notable partial discharge cases |
| 8th Circuit | Totality of Circumstances | Most debtor-friendly standard |
| 9th Circuit | Brunner | Large circuit with varied application |
| 10th Circuit | Brunner | Some flexibility in recent decisions |
| 11th Circuit | Brunner | Moderate to strict |
Even within Brunner circuits, individual bankruptcy judges have significant discretion in how they apply the test. Some judges within the same district may reach different conclusions on similar facts. This is one reason why knowing your local court's tendencies is valuable.
Key Cases That Shaped the Brunner Test
The Foundation
Brunner v. NYSHESC, 831 F.2d 395 (2d Cir. 1987) -- The original case. Marie Brunner sought discharge of $9,250 within months of graduation. The Second Circuit established the three-prong test and denied discharge because she had never attempted to repay and was a healthy recent graduate with no dependents.
The "Certainty of Hopelessness" Era
Brightful v. Pennsylvania Higher Ed. Assistance Agency, 267 F.3d 324 (3d Cir. 2001) -- Articulated the "certainty of hopelessness" standard, requiring debtors to show they would essentially never be able to repay. This was the high-water mark for creditor-friendly Brunner application.
The Pushback
Krieger v. Educational Credit Management Corp., 713 F.3d 882 (7th Cir. 2013) -- Judge Easterbrook criticized the "too restrictive" application of Brunner and noted that courts were adding requirements not found in the original test. This decision helped loosen the standard in the 7th Circuit.
The 8th Circuit Alternative
Long v. Educational Credit Management Corp., 322 F.3d 549 (8th Cir. 2003) -- The Eighth Circuit explicitly rejected Brunner in favor of a totality-of-the-circumstances approach, examining the debtor's past, present, and reasonably reliable future financial resources against living expenses and the loan repayment obligation.
Recent Developments
Rosenberg v. New York State Higher Education Services Corp., 610 B.R. 454 (Bankr. S.D.N.Y. 2020) -- Chief Bankruptcy Judge Morris called the Brunner test "an unfair standard" and "punitive" in a widely cited decision, signaling growing judicial dissatisfaction.
Brunner vs. Totality of the Circumstances
The 8th Circuit's totality test examines the same basic question -- is repayment an undue hardship? -- but does so holistically rather than through rigid prongs. Under the totality test, a court considers:
- The debtor's past, present, and reasonably reliable future financial resources
- The debtor's and dependents' reasonable living expenses
- Any other relevant facts and circumstances unique to the case
The practical difference is significant. Under Brunner, failing any single prong means denial -- even if your overall situation clearly constitutes hardship. Under the totality test, a court can weigh all factors together. A debtor who made some payments but has deteriorating health might fail Brunner's strict prong-by-prong analysis but succeed under a holistic review.
Growing trend: Even within Brunner circuits, some bankruptcy judges have begun applying the three prongs more flexibly, essentially moving toward a totality approach while nominally using the Brunner framework. This trend accelerated after the 2022 DOJ guidance.
Common Reasons Brunner Claims Are Denied
Understanding why claims fail is just as important as knowing the test. The most common reasons for denial include:
- Never applied for income-driven repayment. Courts view this as a failure of good faith. If you have not at least applied for IBR, PAYE, or SAVE, you are unlikely to pass prong three. Courts reason that if the government offers a plan with payments based on your income, you should at least try it before seeking discharge.
- Debtor is young and healthy. Courts may find that a 30-year-old with no health issues and a college degree has earning potential that will eventually allow repayment, even if current income is low. This is where the persistence prong becomes difficult.
- Lifestyle inconsistencies. A debtor claiming inability to pay while taking vacations, eating out regularly, or maintaining luxury subscriptions will face credibility problems. Courts examine Schedules I and J closely.
- Voluntary underemployment. Working part-time by choice, or taking a lower-paying job than your qualifications support, undermines both prongs one and three.
- Recent borrowing. Taking out loans recently and filing immediately raises bad faith concerns. Courts look at the gap between borrowing and filing.
- No attempt to repay. Zero payment history, combined with no documentation of hardship during the repayment period, makes good faith nearly impossible to prove.
How to Build a Brunner Case: Practical Steps
If you are considering seeking student loan discharge, the time to start building your case is before you file the adversary proceeding. Here are concrete steps:
Before Filing
- Apply for income-driven repayment -- even if your payment would be $0. This creates documentation of good faith and generates government records of your financial situation.
- Gather medical records -- if health is a factor, get documentation from every treating provider. Diagnoses, prognoses, and functional limitations should be in writing.
- Compile employment history -- document every job, job search, application, and rejection. Show that you have tried to maximize your income.
- Track expenses meticulously -- keep receipts and records for at least 3-6 months before filing. A detailed, honest budget is critical.
- Save tax returns -- at least 3 years. Tax returns are the single most important income document.
During the Adversary Proceeding
- Be honest on all forms -- any inconsistency between your bankruptcy schedules and your adversary proceeding testimony will be exploited.
- Consider expert witnesses -- vocational experts can testify about your earning capacity; medical experts about your limitations.
- Submit the DOJ attestation form -- for federal loans, this can lead to the government recommending discharge rather than opposing it.
- Be prepared for a settlement offer -- many cases settle with partial discharge or modified terms rather than going to full trial.
The Partial Discharge Option
Not every case is all-or-nothing. Many courts recognize the authority to grant a partial discharge -- reducing the loan balance, eliminating interest, or modifying repayment terms -- even when full discharge is not warranted.
Partial discharge outcomes have become increasingly common and can provide meaningful relief. Examples include:
- Discharging accrued interest while leaving principal intact
- Reducing the balance by a percentage (e.g., 50% discharge)
- Setting a fixed repayment amount over a specific period
- Eliminating penalties and fees while maintaining a reduced balance
If you are not confident you can meet all three Brunner prongs but your situation clearly involves significant hardship, a partial discharge outcome may be realistic and meaningful.
Frequently Asked Questions
Related Resources
- Understanding Undue Hardship -- the broader legal standard behind the Brunner test
- How to File an Adversary Proceeding -- the step-by-step process for seeking discharge
- Recent Changes in Student Loan Bankruptcy -- DOJ guidance, FRESH START Act, and circuit developments
- Private Student Loans -- different rules may apply
- Section 523(a) Explained -- the broader discharge exception framework