In Re Hilal K. Homaidan, 3 F.4th 595

Homaidan took two direct-to-consumer private "Tuition Answer" loans from Sallie Mae/Navient while attending Emerson College; proceeds were paid directly to him and exceeded tuition costs.
He filed Chapter 7 and received a general discharge order that did not specify which debts were discharged; the order referenced that most student loans are nondischargeable.
After the case closed, Navient sought repayment; Homaidan paid in full, then reopened the bankruptcy to sue Navient for violating the discharge order and to seek class relief.
The bankruptcy court denied Navient’s motion to dismiss, concluding 11 U.S.C. § 523(a)(8)(A)(ii) ("obligation to repay funds received as an educational benefit, scholarship, or stipend") did not cover private student loans.
The district court certified the issue for interlocutory appeal to the Second Circuit, which reviewed the statutory interpretation de novo.
The Second Circuit affirmed: § 523(a)(8)(A)(ii) is best read narrowly to cover conditional grant-type obligations (e.g., scholarships, stipends, service-conditioned grants), not ordinary private student loans.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a private, direct-to-consumer student loan is an "obligation to repay funds received as an educational benefit" under 11 U.S.C. § 523(a)(8)(A)(ii)	Homaidan: "educational benefit" is narrower—refers to conditional grants/scholarships/stipends, not ordinary private loans	Navient: the phrase covers loans used to pay for education; thus private student loans are excepted from discharge	Held: Court rejects Navient; § 523(a)(8)(A)(ii) does not sweep in ordinary private student loans and should be read in harmony with neighboring subsections and canons of construction
Whether Navient is estopped from advancing a broad interpretation because it previously lost similar cases	Homaidan: Navient previously argued and lost, so it should be estopped	Navient: not estopped; may advance its interpretation here	Held: Court declines to apply offensive collateral estoppel to bar Navient from arguing its statutory interpretation theory

Saks v. Franklin Covey Co., 316 F.3d 337 (2d Cir. 2003) (statutory interpretation starts with text and context)
Lamar, Archer & Cofrin, LLP v. Appling, 138 S. Ct. 1752 (U.S. 2018) (bankruptcy discharge exceptions must be plainly expressed)
Dada v. Mukasey, 554 U.S. 1 (U.S. 2008) (must consider statutory provision in connection with whole statute)
Russello v. United States, 464 U.S. 16 (U.S. 1983) (omission of language in one subsection suggests deliberate choice)
Marx v. General Revenue Corp., 568 U.S. 371 (U.S. 2013) (surplusage canon and avoiding interpretations that render provisions superfluous)
Freeman v. Quicken Loans, Inc., 566 U.S. 624 (U.S. 2012) (use of noscitur a sociis to construe ambiguous terms by their statutory neighbors)
Yates v. United States, 574 U.S. 528 (U.S. 2015) (limits on overbroad readings of statutory lists)
Cazenovia Coll. v. Renshaw (In re Renshaw), 222 F.3d 82 (2d Cir. 2000) (creditor bears burden to prove a debt is excepted from discharge)
In re Crocker, 941 F.3d 206 (5th Cir. 2019) (alternative circuit interpretation relevant to estoppel and interpretive landscape)
In re McDaniel, 973 F.3d 1083 (10th Cir. 2020) (alternative circuit interpretation addressing scope of § 523(a)(8)(A)(ii))