Private career training student loans may be dischargeable in bankruptcy – and that means the debtor gets protection from attempts at debt collection.

Students are often told their student loans simply can’t be discharged in bankruptcy. Practically speaking, that’s not really true. For the most part, student loans can be discharged, and some private student loans are more easily discharged in bankruptcy than others.

For most types of student loans – even the ones that supposedly can’t be discharged – debtors may qualify for discharge if they can show that their student debt is causing “undue hardship.”

That’s a tough standard to meet, though. It requires the debtor to prove their student debt is preventing them from affording basic necessities like food and housing. It’s rare for a student debtor to be in such dire straits, and for that reason some people get the impression that these student loans are practically undischargeable.

Certain private student loans, like many career training student loans, are much more readily discharged. It’s true that Congress exempted some types of private loans from discharge in a set of amendments to the Bankruptcy Code passed in 2005. However, that exemption applies only to certain specific types of student loans, leaving the rest eligible for discharge.

Generally, if loan funds were taken out for any purpose other than “qualified education expenses,” that loan is subject to bankruptcy discharge. Loans taken out in amounts over the school’s “cost of attendance” can be presumed to have covered something other than qualifying education expenses.

Similarly, if the student wasn’t enrolled for “half-time” or more, they were not a “qualified student” – and the associated loan may be dischargeable. This condition may apply to students who took out career training student loans to cover only part-time school attendance.

The school the student attended may also not be an accredited institution. If the school’s name doesn’t appear on the Department of Education’s list of Title IV eligible schools, the loan may be dischargeable.

Career Training Student Loans After Bankruptcy

The good news for some student debtors who’ve gone through bankruptcy is that their career training student loans may already have been discharged along with their other debts. If so, the borrower is entitled to certain extra protections against attempts to collect those loans.

On top of the general debtor protections that are provided by the Fair Debt Collection Practices Act, former bankruptcy petitioners get legally shielded from attempts to collect any debt that was discharged in bankruptcy. The very purpose of bankruptcy discharge is to render the debt no longer subject to collection efforts.

Any creditor that violates the bankruptcy protection order by attempting to collect a discharged debt may be subject to a civil legal claim. The debtor may be entitled to seek both actual and punitive damages.

Not all debt collectors know that, however. Many may continue to seek payment of a student loan debt even after it’s been discharged. For student loan debtors who think they might be the victims of illegal debt collection efforts, a consultation with a knowledgeable debt collection attorney can give them a good idea of their rights and legal options.