The underutilized student loan bankruptcy discharge

A common misconception is that student loans are never dischargeable in bankruptcy. There is a bankruptcy discharge exception for some qualified student loans and educational benefit repayment obligations. The discharge exception does not, however, apply to all loans made to students. Jason Iuliano argues in a new paper that bankruptcy courts have interpreted the discharge exception too broadly, applying it to loans for unaccredited schools, loans for tutoring services, and loans beyond the cost of attendance for college. His paper presents a compelling argument based on the plain language of the statute, the legislative history and policy in support of a narrow reading of 11 USC §523(a)(8). The Bankruptcy Court for the Southern District of Texas recently adopted the narrow reading of §523(a)(8)(A)(ii) in Crocker v. Navient Solutions, LLC , Adv. 16-3175 (Bankr. S.D. Tx Mar. 26, 2018). The court denied Navient's motion for summary judgment, finding that the…

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