• Proving undue hardship in bankruptcy court is very difficult to accomplish.Jupiterimages/Photos.com/Getty Images
  
  According to a study by FinAid, "Two-thirds (65.6 percent) of four-year undergraduate students graduated with a Bachelor's degree and some debt in 2007-08." For many graduates, this debt may become too great and they will be forced to file bankruptcy. Due to legislation during George W. Bush's presidency, it is now more difficult to discharge student loan debt through bankruptcy, unless the borrower is able to prove that he has undergone undue hardship as a result of making loan repayments.
  
  

Standard of Living

• According to the landmark 1987 case Marie Brunner v New York State Higher Education Services Corp. (NY HESC), the Brunner Test for the eligibility of student loan discharge by bankruptcy includes three requirements. First, borrowers must show that they would not be able to maintain a "minimal" standard of living, based upon expenses and income, if they were required by a court to fulfill the specified debt obligation. Unfortunately, there is no legal definition for "minimal", so it is up to individual bankruptcy courts to determine its meaning. An example of this, but not the standard, may be that after paying a monthly loan payment, the borrower and spouse or any dependents are living at 150 percent below the poverty line.
  
  

Persistence Period

• The second requirement found by the appellate court hearing Brunner's case was that the situation the borrower finds herself in will persist for an extended portion of the loan repayment period. This has an open-ended interpretation. Becoming disabled or having a disabled dependent is one possible interpretation. Severe physical or mental illness can, but does not necessarily, constitute persistence of hardship. An accepted standard for this requirement is a "certainty of hopelessness," meaning that the circumstances have no chance of improving.
  
  

Good Faith Effort

• The final requirement for undue hardship petitions is that the borrower has made a "good faith effort" to repay his or her student loan. As with the other requirements, there is no true legal definition and this is open to interpretation by the specific bankruptcy court. However, generally speaking, this may be met if the borrower made loan payments when income was available and put loans into deferment or forbearance when income was not available. Other aspects of this requirement include the borrower seeking alternate repayment options, such as income-contingent, income-based or extended repayment plans. Also, the borrower must have tried to increase his or her income, while attempting to decrease expenses.
  
  

Other Standards

• The Brunner Test is not the only standard by which eligibility for student loan discharge is determined. The Johnson Test determines a borrower's present and future ability to repay loans based on standard of living, employment and good faith effort of repayment. The Totality of Circumstances Test determines the impact of all the combined reasons that affect the debtor's ability to repay a loan. The Bryant Poverty Test uses the federal poverty line as a benchmark, based upon the borrower's after-tax net income.