Thomas v. Dep't of Educ. (In Re Thomas)
931 F.3d 449
5th Cir.2019Background
- Debtor Vera Frances Thomas filed Chapter 7 in 2017 seeking discharge of two federal student loans taken in 2012; loans entered repayment in 2013 and she made small payments in 2014.
- Thomas, over 60, developed diabetic neuropathy in 2014 that limits her ability to do prolonged standing work; she has been unemployed since 2017 and subsists on public assistance and charity.
- After losing a long-term call‑center job (terminated for policy violations) she had short stints at several employers but could not maintain jobs requiring prolonged standing.
- Bankruptcy court found Thomas satisfied Brunner’s first prong (cannot maintain a minimal standard of living if required to repay) but failed the second prong (that her incapacity to repay is likely to persist for a significant portion of the repayment period).
- District court affirmed; Fifth Circuit (panel) affirmed, holding it is bound by In re Gerhardt (the Fifth Circuit’s adoption of the Brunner test) and that Thomas did not prove the second Brunner factor.
Issues
| Issue | Plaintiff's Argument (Thomas) | Defendant's Argument (DOE) | Held |
|---|---|---|---|
| Whether the Brunner/Gerhardt three‑prong test governs § 523(a)(8) undue‑hardship claims or whether a "totality of the circumstances" test should apply | Brunner is inconsistent with the plain meaning of "undue hardship" and should be replaced by a totality test that imposes a lower burden | Brunner/Gerhardt is controlling precedent in this circuit; Congress intended a demanding standard limiting student‑loan discharges | Brunner/Gerhardt remains controlling in the Fifth Circuit (bound by Gerhardt); totality approach rejected |
| Whether Thomas demonstrated "undue hardship" under Brunner/Gerhardt (in particular the second prong: that her inability to repay will persist) | Thomas argued her diabetic neuropathy and medical expenses make it unlikely she can obtain or keep suitable employment long enough to repay | Government acknowledged Thomas meets the first prong; disputed persistence of incapacity and noted she can perform sedentary work and obtained several jobs after 2014 | Thomas failed the second Brunner prong: record shows she can perform sedentary work, obtained post‑injury employment, and loss of the call‑center job was for cause; student loans are not dischargeable |
Key Cases Cited
- Brunner v. New York State Higher Education Servs. Corp., 831 F.2d 395 (2d Cir. 1987) (articulated three‑part undue‑hardship test adopted by most circuits)
- In re Gerhardt, 348 F.3d 89 (5th Cir. 2003) (Fifth Circuit adoption of Brunner standard; controlling here)
- In re Frushour, 433 F.3d 393 (4th Cir. 2005) (adopts Brunner and explains demanding nature of undue‑hardship standard)
- Long v. Educ. Credit Mgmt. Corp. (In re Long), 322 F.3d 549 (8th Cir. 2003) (rejects Brunner in favor of a more discretionary totality test)