Does Discharging My Student Loans in Bankruptcy Invalidate My Degree?

Student Loan Discharge Does Not Invalidate Your Degrees

When you file for bankruptcy, and even when your student loan debt is discharged, you will not lose your degree. Nothing in the student loan discharge process invalidates your degree(s). Furthermore, filing for bankruptcy protects you from being denied access to your official academic records.

If You are Having Trouble Accessing Official Transcripts, Filing for Bankruptcy Might Help

When you have defaulted on payments to your college or other degree-conferring institution, they may opt to withhold your official academic transcripts. Filing for bankruptcy can help you get access to your official academic transcripts based on three separate provisions in the US Bankruptcy Code:

  • Automatic Stay: As soon as you file for bankruptcy, the automatic stay provision of the bankruptcy code prevents the college from withholding official transcripts for the duration of the case. The automatic stay provision is in place immediately after you file, and it remains in effect until the case is closed or dismissed.
  • Anti-Discrimination: If you attended a public institution (like a state university for undergraduate or graduate studies), the anti-discrimination provision of the bankruptcy code prohibits the institution from discriminating against a debtor who has filed for bankruptcy or who has discharged their debts in bankruptcy. This means that the institution cannot withhold your official academic transcript as proof of your degree once you have filed for bankruptcy.
  • Discharge Injunction: Whether you attended a public or private school, your university may not refuse to supply your official transcripts after your student loan debt is discharged.

You Have a Right to Access Your Education Records

According to the Family Education Rights and Privacy Act (FERPA), you have a right to inspect and review your own education records⁠—even if you have defaulted on your student loan bills and have not yet filed for bankruptcy. This does not necessarily mean that you are always entitled to an official academic transcript, but you have the right to access your own education records at any time.

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