Opinion
Case No. 16-52599
2023-09-19
IN RE: James N. CRAWFORD, Debtor.
Kenneth L. Sheppard, Jr., Sheppard Law Offices Co. L.P.A., Columbus, OH, for Debtor.
Kenneth L. Sheppard, Jr., Sheppard Law Offices Co. L.P.A., Columbus, OH, for Debtor.
ORDER DISCHARGING ORDER TO SHOW CAUSE TO SALLIE MAE BANK
C. Kathryn Preston, United States Bankruptcy Judge
James N. Crawford, the Debtor in this 2016 Chapter 7 case ("Debtor"), filed an Amended Motion for an Order to Show Cause Why Creditor Sallie Mae Bank Should not be Held in Contempt of Court for Violation of the Automatic Stay and Discharge Injunctions (Doc. #27) (the "Motion), whereupon the Court issued an Order Requiring Sallie Mae Bank to Appear and Show Cause Why It/They Should Not Be Held in Contempt for Willful Violation of Automatic Stay and/or Discharge Injunction (Doc. #28) (the "OTSC"). Sallie Mae Bank ("Sallie Mae") filed a response to the Motion (Doc. #34). Debtor filed a reply (Doc. #35) ("Debtor's Reply"), which alleged numerous facts and posited numerous new theories not raised in the Motion. At the Court's invitation, Sallie Mae filed a surreply (Doc. #46). Each party submitted affidavits with their papers. At the hearing on the OTSC, the parties agreed that a threshold issue is whether the debt owed to Sallie Mae was discharged by Debtor's Chapter 7 discharge, and that the issue can be decided upon the materials before the Court. The Court will consider the appropriate averments in the affidavits, but cannot, of course, consider any legal conclusions set forth in an affidavit, facts of which the affiant has not illustrated that he or she has personal knowledge, or facts to which the affiant would not be permitted to testify (based on the information contained in the affidavit).
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and Amended General Order 05-02 entered by the United States District Court for the Southern District of Ohio, referring all bankruptcy matters to this Court. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I) and (O).
I. Findings of Fact
The facts relevant to resolution of the threshold issue are without genuine material dispute. Debtor is indebted to Sallie Mae for two student loans incurred prior to his Chapter 7 bankruptcy case. Sallie Mae identifies the loans as Loan 1413 and Loan 9232. To defray the costs of her education at Oklahoma City University ("OCU"), Debtor and his daughter Emily Crawford ("Emily") had obtained the two student loans, under a program known as "Smart Option Student Loans." Debtor co-signed the loans with Emily.
Debtor filed a Voluntary Petition for relief under Chapter 7 of the Bankruptcy Code on April 20, 2016. A copy of the Notice of Chapter 7 Bankruptcy Case (Doc. #7), alerting creditors and parties in interest to the pendency of the bankruptcy case and the automatic stay, was mailed to Sallie Mae by the clerk of court. See BNC Certificate of Notice (Doc. #8). No objections to discharge or requests for determination of dischargeability of debt were lodged. The Court issued an Order of Discharge (Doc. #14) on September 13, 2016. A copy of the Order of Discharge was mailed to Sallie Mae by the clerk of court. See BNC Certificate of Notice (Doc. #15).
After the Discharge was issued, Sallie Mae began efforts to collect the balances due under the two notes. After payment of some of the debt, Debtor filed the Motion asserting that Sallie Mae's conduct constitutes violation of the automatic stay and the discharge injunction. Debtor seeks an order holding Sallie Mae in contempt and awarding Debtor actual and punitive damages.
Debtor alleges that he has paid Sallie Mae over $16,000 since 2017.
II. Arguments of the Parties
Debtor argues that the student loans held by Sallie Mae are private, dischargeable loans, which do not fall within the scope of exceptions to discharge articulated in 11 U.S.C. § 523(a)(8)(A). Debtor relies on Homaidan v. Sallie Mae, Inc., 3 F.4th 595 (2d Cir. 2021) for this proposition. Debtor points out that Sallie Mae did not file an adversary proceeding seeking a court determination of dischargeability of the debt, and that Debtor did not enter into a reaffirmation agreement with Sallie Mae regarding the loans. In the alternative, Debtor asserts that, for a plethora of reasons, the loans are not qualified education loans as that term is used in 11 U.S.C. § 523(a)(8)(B), which also excepts certain debts from the Discharge. Either way, according to Debtor, the loans are not excepted from discharge pursuant to § 523(a)(8) and actions to collect the outstanding balance are, therefore, barred by the discharge injunction.
Sallie Mae counters that (1) Homaidan does not apply; (2) the loans are nondischargeable "qualified education loans" pursuant to § 523(a)(8)(B) of the Bankruptcy Code; and (3) Debtor's theories why the loans were allegedly discharged are not supported by any factual evidence or law. Moreover, according to Sallie Mae, even if the dischargeability of the loans is in question, the remedy of civil contempt is not available to Debtor under the Supreme Court decision Taggart v. Lorenzen, — U.S. —, 139 S. Ct. 1795, 204 L.Ed.2d 129 (2019), because there is a "fair ground of doubt" whether Sallie Mae's conduct was wrongful based on case law holding private student loans nondischargeable and such loans collectable despite a bankruptcy discharge.
III. Analysis
A. Sallie Mae Did Not Violate the Automatic Stay
Before addressing the question of dischargeability of the Sallie Mae loans, the Court can dispose of that prong of the Motion asserting violation of the automatic stay.
When Debtor filed his petition for relief under the Bankruptcy Code, § 362 of the Bankruptcy Code automatically imposed a stay prohibiting most activity to collect debts owed by Debtor. 11 U.S.C. § 362(a). Upon entry of the Discharge on September 13, 2016, the automatic stay expired as to Debtor and Debtor's assets. 11 U.S.C. § 362(c)(2). Debtor's materials indicate that Sallie Mae commenced efforts to collect the balances due from Debtor on or about September 20, 2016, after entry of the Discharge. The Motion does not allege that Sallie Mae undertook any efforts to collect the debt owed by Debtor prior to the entry of the Discharge. Thus, the Motion fails to illustrate that the automatic stay was violated by Sallie Mae, and the Motion must be denied to the extent that it asserts such violations.
B. Sallie Mae Did Not Violate the Discharge Injunction
Upon entry of the order granting Debtor a discharge and the resulting expiration of the automatic stay, in its place the Bankruptcy Code imposed the discharge injunction.
Section 727 of the Bankruptcy Code provides for a bankruptcy discharge in Chapter 7 cases, stating in pertinent part:
(a) The court shall grant the debtor a discharge . . . .11 U.S.C. § 727(a) and (b). Obtaining a discharge is the goal of most individuals who seek bankruptcy relief. The discharge essentially represents the release of the legal obligation to pay the debtor's debts, except as provided in § 523. Houston v. Edgeworth (In re Edgeworth), 993 F.2d 51, 53 (5th Cir. 1993). As stated in § 727, exceptions to the discharge are set forth in § 523. Among the exceptions are particular student loans. Section 523(a) provides in pertinent part:
(b) Except as provided in section 523 of the title, a discharge under subsection (a) of this section discharges the debtor from all debts that arose before the date of the order for relief under this chapter
. . . .
(a) A discharge under section 727 . . . does not discharge an individual debtor from any debt11 U.S.C. § 523(a)(8).
. . .
(8) . . . for
(A)(I) . . . [a] loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or
. . .
(B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual.
In order to effectuate the bankruptcy discharge, § 524 provides:
(a) A discharge in a case under this title11 U.S.C. § 524(a) (emphasis added). Thus, if a debt is excepted from the bankruptcy discharge, the discharge injunction presents no impediment to collection activities by the creditor holding that debt.
(1) voids any judgment at any time obtained, to the extent that such judgment is a determination of the personal liability of the debtor with respect to any debt discharged under section 727 . . . of this title . . . ;
(2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor
. . . .
1. Dischargeability of Private Educational Loans under § 523(a)(8)(A)(ii)
Debtor first argues that the student loans were "direct-to-consumer" private loans that were not made for "qualified education expenses." Thus, asserts Debtor, the loans were dischargeable, relying on Homaidan v. Sallie Mae, Inc. (In re Homaidan), 3 F.4th 595 (2d Cir. 2021). Homaidan does not avail him.
In Homaidan, Homaidan had brought a complaint for declaratory judgment against certain student loan lenders (collectively referred to as "Navient"), seeking a determination that his direct-to-consumer loans had been discharged by his Chapter 7 bankruptcy. Because Navient had made attempts to collect the debt after entry of Homaidan's discharge, Homaidan also sought damages for violation of the discharge injunction. Section 523(a)(8)(B) was at the core of the complaint. Navient moved to dismiss the adversary proceeding, arguing that the court need not assess the dischargeability of Navient's debt under § 523(a)(8)(B) because the debt was excepted from discharge by § 523(a)(8)(A)(ii) absent a finding of undue hardship on the debtor or the debtors dependents. The bankruptcy court denied Navient's motion to dismiss the complaint. Homaidan v. SLM Corp. (In re Homaidan), 596 B.R. 86 (Bankr. E.D.N.Y. 2019).
Navient appealed the decision to the Second Circuit Court of Appeals. Navient theorized that since the loans were used for educational purposes, they constituted an "educational benefit, scholarship, or stipend" under § 523(a)(8)(A)(ii). Navient did not address the implications of 11 U.S.C. § 523(a)(8)(B). The loans in question were direct-to-consumer loans, and as such, were paid directly to Homaidan, not to the university he was attending, and exceeded the costs of his college tuition. After careful and thoughtful analysis of § 523(a)(8)(A)(ii), applying principles of statutory construction and canons of statutory interpretation, the Second Circuit concluded that the direct-to-consumer loans that Homaidan received while attending college were not obligations to repay funds received as an educational benefit, scholarship, or stipend under § 523(a)(8)(A)(ii), and thus were not excepted from the discharge pursuant to that provision. The court briefly mentioned qualified educational loans under § 523(a)(8)(B), but did not discuss dischargeability under that section of the Bankruptcy Code.
The Second Circuit observed that the implication of Sallie Mae's interpretation is that virtually all loans which were used for educational purposes would be excepted from discharge under § 523(a)(8)(A)(ii), leaving no role for the other provisions of § 523(a)(8). This would violate the tenet of statutory interpretation requiring the Court to avoid interpretations rendering other statutory language surplusage. Homaidan, 3 F.4th at 602.
In the present case, Debtor contends that his loans were direct-to-consumer loans of the sort addressed by the Homaidan court. In the Motion, Debtor cites Homaidan, stating that the loans he received were private loans not made for qualified education expenses. However, Debtor misconstrues Homaidan and neglects to consider whether his loans would be dischargeable under the provisions of § 523(a)(8)(B). The Court does not take issue with Debtor's reading of Homaidan as it relates to whether loans made and used for educational purposes are excepted from discharge under § 523(a)(8)(A)(ii). The Court takes issue with Debtor's understanding of how Homaidan relates, or rather does not relate, to the present case.
Homaidan did not declare private student loans dischargeable; it merely held that such loans do not fall within the ambit of § 523(a)(8)(A)(ii) and that § 523(a)(8)(A)(ii) does not apply to such loans. The loans obtained by Debtor were not scholarships, stipends, or conditional education grants, and thus do not fall within the scope of § 523(a)(8)(A)(ii). The loans that Debtor obtained were private loans made for the purpose of facilitating his daughter's attendance at an eligible school. Moreover, Sallie Mae's papers definitively illustrate that Debtor's loans were not direct-to-consumer loans. Accordingly, the Court finds that Homaidan is not relevant to the present case.
This leaves for consideration whether the loans are nondischargeable pursuant to § 523(a)(8)(B).
2. Debtor Has Failed to Illustrate that the Loans Are Not Qualified Educational Loans for Purposes of § 523(a)(8)(B)
Debtor next insists that the loans are dischargeable on the basis that they are not "qualified educational loans" as that term is used in 11 U.S.C. § 523(a)(8)(B).
In addition to governmentally made, insured or guaranteed loans excepted from discharge by § 523(a)(8)(A)(i), § 523(a)(8)(B) excepts from discharge "any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual."
A "qualified education loan" is defined in IRC § 221 as:
The Internal Revenue Code of 1986, 26 U.S.C. § 1, et seq., will be referred to as "IRC".
indebtedness incurred by the [debtor] solely to pay qualified higher education expenses—
(A) which are incurred on behalf of the [debtor] . . . or any dependent of the [debtor] as of the time the indebtedness was incurred,26 U.S.C. § 221(d)(1).
(B) which are paid or incurred within a reasonable period of time before or after the indebtedness is incurred, and
(C) which are attributable to education furnished during a period during which the recipient was an eligible student.
The term "qualified higher education expenses" means the "cost of attendance (as defined in section 472 of the Higher Education Act of 1965) . . . at an eligible educational institution . . . ." 26 U.S.C. § 221(d)(2). In addition to certain other expenses, the term "cost of attendance" encompasses
(1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution, and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study; (2) an allowance for books, supplies, transportation, and miscellaneous personal expenses . . . for a student attending the institution on at least a half-time basis, as determined by the institution . . . .20 U.S.C. § 108711.
The term "eligible student" means a student who meets the requirements of 20 U.S.C. § 1091(a)(1), and is carrying at least half the normal full-time workload for the course of study that the student is pursuing. 26 U.S.C. § 25A(b)(3). Section 1091(a)(1) defines "eligible student" as a student who "must (1) be enrolled or accepted for enrollment in a degree, certificate, or other program . . . leading to a recognized educational credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 1094 of this title[.]" 20 U.S.C. § 1091(a)(1). An "eligible institution" means, among other things, a proprietary institution of higher education and a postsecondary vocational institution. See 20 U.S.C. § 1002(a).
Debtor posits that the student loans are not qualified education loans for the following reasons:
[1] OCU steered Emily K. Crawford to apply for the SMB Loans [citing 34 CFR § 601.40, 682.205]
[2] None of the Loan documents disclose the Loans are "Qualified Education Loans"
[3] None of the Loan documents disclose the Loans are nondischageable [sic] pursuant to U.S. Bankruptcy Code 11 U.S.C. § 523(a)(8)(B)
[4] The Loans documents disclose SLM Corporation, a Delaware corporation, as the True Lender, which makes the Loans in violation of the state of Delaware Usury laws
[5] The Loans were Accepted [by Emily] without informed consent in violation of disclosure laws 34 C.F.R. § 601.40, 34 C.F.R. § 682.205
[6] The SMB and/or SLM Loans violate the Parol Evidence Rule by asserting the Loans are "Qualified Education Loans" absent any such language contained within the Loan documents
[7] The Loans online-only process forced Acceptance of Variable Rate Type Loans without disclosing the Fixed Rate Type Loans offered would never be approved
[8] The Loans are "A Wolf in Sheep's Clothing" Loans because the product offered and Accepted was a different product than the actual product, meaning, the product offered and Accepted was a "Qualified Education Loan" nondischargeable, but was disguised as a "Smart Option Student Loan" dischargeable
[9] The Loans are part of a scheme designed and executed by SMB and/or SLM to deceive naïve college students to seek and Accept student loans that are predatory and not in the best interest of the student borrowers and their co-signersDebtor's Reply at 13-14.
[10] The Loan Promissory Notes do not list an address for SMB in violation of all applicable disclosure laws
[11] The Loan agreements are not enforceable as a matter of contract formation law [due to Emily's uninformed consent]
[12] The Loans are intentionally predatory which harmed Emily K. Crawford and Debtor
[13] SMB and SLM intentionally confuse the marketplace by both d/b/a Sallie Mae
[14] SMB and/or SLM pushed Emily K. Crawford and Debtor into costly, subprime, private loans they would be unable to discharge without disclosure
[15] SLM has about $19.68 billion worth of college student loans at present which demonstrates the "Cash-Cow" it created through its "Smart Option Student Loan" predatory scheme to deceive college student borrowers[.]
Conspicuous in its absence from Debtor's materials is any legal authority supporting the proposition that any of Debtor's complaints disqualify either of the loans from being a "qualified education loan" as that term is used in § 523(a)(8)(B). This alone is fatal to the Motion. See Sanders v. JGWPT Holdings, Inc., Case No. 14 C 9188, 2016 WL 4009941, at *11 (N.D. Ill. July 26, 2016) ("It is not the Court's responsibility to find arguments, facts, and supporting case law for the parties."); U.S. v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991) ("Judges are not like pigs, hunting for truffles buried in briefs."). In addition, Debtor fails to allege facts sufficient to support his allegations. Most of Debtor's factual "allegations" are actually conclusions. But even assuming the allegations to be true, the meager legal authority offered by Debtor does not advance his cause.
a. Steering Emily to Apply for Sallie Mae Loans (Reason [1]).
Debtor complains that OCU's financial aid counselor "steered" Emily to apply for student loans from Sallie Mae, asserting that this was in violation of 34 C.F.R. §§ 601.40 and 682.205. However, the Court finds nothing in those regulations that addresses the advice a financial aid counselor can provide a student. Moreover, Debtor recites no facts to support a finding that Emily's financial aid adviser was an employee or agent of Sallie Mae, or otherwise under the control or supervision of Sallie Mae. Without more, Sallie Mae cannot be held responsible for OCU's employee's conduct. Even if Debtor's allegation is accurate, he cites no authority supporting the proposition that the OCU employee's conduct excepts the loans from meeting the criteria of qualified education loans or excepts the loans from the reach of § 523(a)(8)(B).
b. Disclosure of the Loans as Qualified Education Loans and Nondischargeable (Reasons [2] , [3] , [6] , [8] , [14]).
Debtor next complains that the loan documents do not disclose that the loans are qualified education loans and that they are nondischargeable pursuant to the Bankruptcy Code. Debtor has cited no authority requiring such disclosures, or that failure to include such disclosures renders the loans dischargeable; the Court is confident that there is none. Debtor's reference to the parol evidence rule in reason [6] above is nonsensical, a non sequitur, and misplaced.
As an aside, the Court notes that the promissory note for each loan specifically states, in bold, "This loan may not be dischargeable in bankruptcy." See Debtor's Reply [Exhibits to Affidavit of Emily K. Crawford], pp. 46, 60.
Debtor emphasizes that Emily applied for and obtained Smart Option Student Loans, which, Debtor asserts, are dischargeable. Debtor misconstrues the term "qualified education loan" and the "Smart Option Student Loan" program title. The Smart Option Student Loans are offered under a program initiated and launched by Sallie Mae in 2009. See SLM Corp., 2022 Annual Report (Form 10-K) at 3, available at www.salliemae.com/content//dam/slm/written content/Reports/investors/2022_Annual_10-K.pdf. The term "qualified education loan" does not refer to a lending program, but rather to a category of student loans described by the statutes. Contrary to Debtor's belief, a Smart Option Student Loan is not dischargeable if it falls within the definition of a qualified education loan and is thereby encompassed by § 523(a)(8)(B). Debtor and Emily obtained the loan product that they requested, and Debtor's reason [8] above is not accurate and does not render the loans dischargeable.
c. Debtor Has Not Illustrated that SLM is the Lender in the Loan Transaction (Reason [4]).
Debtor next asserts that SLM Corporation is the alter ego of Sallie Mae and the "True Lender," and since SLM is a Delaware corporation, the loans violate Delaware's usury laws. Debtor does not explain what he means by "True Lender" but the loan documents do not state anywhere that SLM is the lender in the subject loan transactions. To the contrary, the documents attached to Debtor's Reply are replete with references to Sallie Mae or Sallie Mae Bank as the lender. See Debtor's Reply [Exhibits], pp. 28, 36, 42, 43, 51, 57, 66, 69. Nor does Debtor allege any facts to support a finding that SLM is the actual lender in the loan transaction, or that SLM is an alter ego of Sallie Mae. That being the case, there is no showing that Delaware's usury laws are implicated or relevant.
d. Emily's "Uninformed Consent" Does Not Inure to Debtor's Benefit (Reasons [5] , [11]).
Debtor next asserts that Emily was an unsophisticated consumer and her acceptance of the loans "constituted uninformed consent pursuant to 34 C.F.R. § 601.40, 34 C.F.R. § 682.205, and contract formation law." Debtor's Reply at 11. It is unclear why Emily's agreement to the loan transactions was "uninformed", but Debtor does not cite any authority for the notion that Emily's failure to be or become informed disqualifies the loans as qualified education loans and nondischargeable.
Part 601 of Title 34 of the Code of Federal Regulations addresses institution and lender requirements relating to education loans. Section 601.40 requires lenders to make the disclosures set forth in § 682.205 and 15 U.S.C. § 1638(e) (the Truth in Lending Act). Debtor fails to illustrate how the required disclosures relate to Emily's "uninformed consent." He does not allege that any of the required disclosures were not made. Nor does he cite to any law that requires "informed consent" in the formation of contracts or that explains the ramifications of "uninformed consent."
But more importantly, Debtor does not allege that his acceptance of the loan terms and participation in the transaction was "uninformed." Debtor is a cosigner of the loans; he is independently obligated on the loans. Even if Emily's "uninformed consent" in some way compromises Sallie Mae's rights to collect the debts from Emily, it does not avail Debtor. Thus, Debtor fails to demonstrate that loans do not fall within the nondischargeability provisions of 11 U.S.C. § 523(a)(8)(B). e. Debtor Has Not Illustrated that Any of the Remaining Issues Impact the Nondischargeability of the Loans (Reasons [7] , [9] , [10] , [12] , [13] , [15]).
Finally, Debtor asserts that (1) the online loan process forced acceptance of variable rate loans without disclosing that fixed rate loans would not be approved; (2) Sallie Mae failed to provide an address as is required by disclosure laws; (3) that Sallie Mae and SLM confuse the marketplace by both using a trade name of "Sallie Mae" and (4) that the loans are a result of predatory lending by Sallie Mae.
As stated above, Debtor does not cite any authority supporting a theory that any of these issues voids his obligations under the promissory notes evidencing the loans, or disqualifies the loans as qualified education loans, or impacts the nondischargeability of the loans. Moreover, as to the first, third and last issues described in the preceding paragraph, Debtor fails to allege any facts supporting his theories. He fails to demonstrate that he was forced in any way to enter into the loan transactions, or that he was prohibited from pursuing or electing other loan products or that he could not investigate the offerings of other financial institutions. He fails to allege or demonstrate any marketplace confusion or personal confusion. And finally, he fails to allege facts sufficient to support a finding that Sallie Mae engages in predatory lending.
3. Sallie Mae Has Demonstrated that Debtor's Debts to Sallie Mae Are Qualified Educational Loans
In its papers, Sallie Mae illustrated that it has met all the requirements for Debtor's loans to be deemed qualified educational loans for purposes of nondischargeability pursuant to § 523(a)(8)(B). Debtor and Emily (Debtor's dependent) applied for the loans for the academic years August 2014 to May 2015 and August 2015 to May 2016, in order for Emily to attend Oklahoma City University. Sallie Mae's response to the Motion and the attached affidavit show that, prior to approving the loans, Sallie Mae submitted the proposed loans to OCU for certification to ensure that the amount was appropriate and within OCU's cost of attendance for the period covered by the proposed loan. Sallie Mae additionally required Emily to submit self-certification forms identifying OCU's cost of attendance for the periods covered by the proposed loan and the estimated financial assistance Emily obtained for the periods covered by the proposed loans. Notably, the loan documents signed by Debtor state "You agree that your loan will be used solely to pay qualified higher education expenses of [the] Student at the School." See Debtor's Reply [Exhibits], p 43. Each of the loans was disbursed by Sallie Mae directly to OCU in two installments, one near the commencement of the Fall semester and one near the start of the Winter/Spring semester.
Additionally, Sallie Mae confirmed that OCU was an "eligible institution," as that term is defined in 20 U.S.C. § 1094(i)(4). Prior to approving the SMB Loans, Sallie Mae verified that OCU was a Title IV qualified school under the Higher Education Act by reviewing information published in the Postsecondary Education Participants System and the Office of Federal Student Aid's management information system. Debtor does not dispute that Emily was an eligible student enrolled at OCU, an eligible institution, at the time that the loans were incurred, or that the loan funds were used to pay the cost of her attendance.
Thus, it is clear that the debts Debtor owes to Sallie Mae meet the criteria for qualified educational loans and are nondischargeable pursuant to § 523(a)(8)(B). Inasmuch as Debtor's obligations to Sallie Mae were not discharged in his Chapter 7 case, Sallie Mae did not violate the discharge injunction in pursuing collection of the student loan debts.
IV. Conclusion
In light of the foregoing, the Court finds that the Sallie Mae did not violate the automatic stay imposed by 11 U.S.C. § 362 or the discharge injunction imposed by 11 U.S.C. § 524. The Order Requiring Sallie Mae Bank to Appear and Show Cause Why It/They Should Not Be Held in Contempt for Willful Violation of Automatic Stay and/or Discharge Injunction (Doc. #28) is discharged.
IT IS SO ORDERED.