Certified Financial Planner (CFP) Practice Exam 2025 – All-in-One Study Guide for Exam Success!

Student loans are generally not discharged in bankruptcy due to specific protections in the law. The assumption is that education should be viewed as a lifelong investment, and thus, the obligation to repay student loans persists even after bankruptcy proceedings. To discharge student loans in bankruptcy, the borrower must demonstrate "undue hardship," which can be a difficult standard to meet and often varies by jurisdiction. This requirement is designed to ensure that individuals still retain some responsibility for their educational debts, reflecting the belief that education is a valuable asset.

In contrast, credit card debt, medical bills, and various types of consumer debt can typically be discharged in bankruptcy, providing a pathway for individuals overwhelmed by financial obligations to regain their footing. The distinction regarding student loans underscores the complexities involved in different types of debt and the potential long-term consequences associated with certain financial decisions.