Are Ascent college loans dischargeable in bankruptcy?

Ascent college loans are private education loans and, therefore, generally cannot be discharged like other forms of unsecured consumer debt in a bankruptcy petition without proving “undue hardship” and an extra step in the process called an “adversary proceeding.”

For new Ascent college loans originated beginning June 5, 2023 (“Eligible Ascent Loans”), we have created a process for discharge that does not require a showing of an “undue hardship.” For Eligible Ascent Loans, a borrower or cosigner may obtain a discharge after either (a) making sixty (60) regularly scheduled full principal and interest payments or (b) being in default for five (5) years, if the following conditions (outlined in the terms of your promissory note) are met:

  • List Eligible Ascent Loans in bankruptcy petition and schedules;
  • File an adversary proceeding complaint seeking to declare the Eligible Ascent Loans dischargeable pursuant to Section 523(a)(8) of the United States Bankruptcy Code (the “Complaint”);
  • Serve the Complaint and an accompanying summons in accordance with the Federal Rules of Civil Procedure;
  • Include in the Complaint a sworn statement signed by borrower/cosigner that all statements in the Complaint are true and accurate and that the proceeds of the Eligible Ascent loan were used solely to pay for qualified higher education expenses (as defined by IRS code); and
  • The court must grant an order for discharge.
If your Eligible Ascent Loan is cosigned, then you and your cosigner must follow these requirements to obtain discharge of your respective obligations.
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