Opinion
No. 78-309
November 6, 1979
Discharge of Debts — Student Loans — Undue Hardship
A debt owing on a student loan insured under the Higher Education Act of 1965 is dischargeable under 20 U.S.C.A. 1087-3, Section 439(a), if payment of the debt would impose an undue hardship on the debtor. See Sec. 17a(9) at ¶ 2152(A) and Sec. 523(a)(8) at ¶ 9234.
[Digest of Opinion]
The debtor had received a student loan from the creditor under the Higher Education Act of 1965 within five years of filing a petition in bankruptcy. The creditor sought a determination that the amount due on the student loan was not dischargeable under the Higher Education Act of 1965, 20 U.S.C.A. 1087-3, Section 439(a).
The evidence introduced at the trial indicated that the debtor was trained as a "format coder". Her gross weekly pay was $142.10. The debtor was the sole support of herself and her two year old son who suffered from a heart murmur and required treatment for his condition. While the debtor might qualify for public aid, "she has been determined to make her own way and has never applied for such help." Her assets consisted of a few items of furniture, her clothing and that of her son, and a $200 Ford Pinto, which she needed to get to work. The budget the debtor filed with the court left nothing for recreation of any kind. The court determined that while the debtor could pay $10 a month in repayment of the student loan, this was not the test for "undue hardship". Rather, the court was satisfied that any payment required of the debtor would impose an undue hardship on her and her son. Accordingly, the debt was discharged.