Before me on a stipulated record is In-ger Kopfs request that the educational loans she owes to the United States Department of Education (the “Department”) be discharged pursuant to § 523(a)(8) of the Bankruptcy Code. 1 For the reasons set forth below,' I conclude that Ms. Kopf has not demonstrated that excepting her student loan obligation from discharge will subject her to undue hardship within the meaning of § 523(a)(8). Therefore, the loans will not be discharged.
Facts
The parties have stipulated to the following facts:
1. Kopfs take-home pay from her job in retail [sales] is $306.44 per week, after deducting $73.56 for state and federal taxes. Her monthly take-home pay is $1328.
2. Kopfs monthly expenses are $1262, excluding any “extraordinary expenses.” 2
3. Kopf is divorced and solely supports herself and her five-year-old son.
4. Kopf took out the student loans in question to pursue a Bachelor’s Degree in Wildlife Biology. She never completed the program, having left school when her ex-spouse became seriously ill.
5. Kopf is indebted on five student loans for a total original principal amount of $12,550: an August 2, 1984, loan for $2500; an August 8, 1985, loan for $2500; a January 15, 1986, loan for $1000; a September 4, 1986, loan for $2500, and a December 3,1987, loan for $4050.
6.The June 1, 1988, “Repayment Schedule/Disclosure Statement” indicates a $12,500 balance and projected interest of $5608. The total of $18,108 was divided into 120 payments (10 years) of $139.40 a month to commence December 28, 1988. 3
The parties have also stipulated that although the Department’s administrative regulations do not provide for discharge of student loans based solely on economic hardship, they do permit Kopf to apply for an amended (decelerated) repayment schedule based on income and expenses. If Kopf were unable to make monthly payments, her payment would be “set at zero.”
Discussion
A. The Statute
The Code provides that Kopfs Chapter 7 discharge does not include the discharge of a debt,
for an educational benefit overpayment or 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 for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor’s dependants[.]
§ 523(a)(8)(emphasis added).
B. Jurisdiction
My § 523(a)(8) determination is a core matter pursuant to 28 U.S.C. § 157(b)(2)(I) on which I enter final judgment.
See Green v. Sallie Mae Servicing Corp. (In re Green),
C. Burden of Proof
Kopf bears the burden of proving she is entitled to a discharge of her student loans by a preponderance of the evidence.
See Grogan v. Garner,
D.Economic Hardship as Part of the § 523(a)(8) Analysis
The United States argues that I need not review the debtor’s “personal and financial facts and circumstances” because “facts and circumstances relating only to an economic hardship on a debtor and a debtor’s dependants” are not relevant to the § 523(a)(8) inquiry.
Admitting the absence of any buttressing statutory or decisional authority, the Department “relies upon logic and reason in support of its position.” It offers three observations on the Code and the Department’s procedures to support its viewpoint. First, Congress has strung together “an ever increasing list of debts under § 523 which are non-dischargeable in a Chapter 7.” Most of them operate without reference to the debtor’s post-discharge financial status. 5 Second, Congress recently constricted the dischargeability of student loans, eliminating the § 523(a)(8) seven-year time limit on nondischargeability with the 1998 Bankruptcy Code amendments. 6 Third, debtors may take advantage of the Department’s regulations providing loan repayment relief based on economic hardship. Debtors with “only” economic hardship should be “relegated” to these administrative options.
I decline to take the United State’s pie-in-the-sky approach to statutory interpretation. When Congress eliminated the seven-year discharge provision from
The Department’s administrative policies may provide repayment relief to needy debtors, but, as the government concedes, they do not provide for discharge of student loans. The Code establishes that student loans may be discharged upon a debtor’s showing of “undue hardship.” That term’s content has long included consideration of a debtor’s economic circumstances — his or her ability to repay the debt according to its terms. The fact that a creditor may assert its willingness to wait for repayment — for however long — does not equate with the obligation’s discharge. 8 And, so long as Congress has provided an avenue by which the debtor may discharge an obligation, the courts must apply the law as written, no matter how strenuously, or how formally, a creditor protests that its post-bankruptcy collection efforts will be humanely executed. 9
Without express statutory definítion, “undue hardship” has proved an eely notion. Courts have long struggled to articulate its content.
See Tennessee Student Assistance Corp. v. Hornsby (In re Hornsby),
1. Testing the Tests
Although I am wont to belabor the discussion, it is necessary to labor a little. The parties before me deserve to know which test I apply and why. 12
a. The In re Johnson Test
Pennsylvania Higher Education Assistance Agency v. Johnson (In re Johnson)
is a seminal § 523(a)(8) decision, referred to by most courts applying the student loan discharge exception.
The
Johnson
court articulated a “mechanical test” for “undue hardship,”
id.
at 539, employing a “checklist of factors,”
id.
at 536, against which to compare the facts of each case. The court considered the debtor’s rate of pay, wages and/or salaries earned, skills, sex, ability to obtain or retain employment, current employment status, employment record, education, health, access to transportation, and dependents.
See id.
at 537-38. It also considered other sources of income or wealth.
See id.
at 538. The inquiry then addressed the debtor’s expenses, looking, first, at what expenses would be necessary for a hypothetical debtor in a similar situation, and, second, at any extraordinary expenses special to the debtor before it.
See id.
at 538. The aim was to determine whether the debtor’s “future financial resources for the longest foreseeable period of time al
In re Johnson did not, however, stop with the assessment of “undue hardship.” It required that at least one of two additional tests be applied: the “good faith” probe and a “policy” inquiry.
To pass the “good faith test” the debtor must show that he or she had made a “bona fide attempt to repay the loan.” See id. at 540 (citing A. Ahart, Discharging Student Loans in Bankruptcy, 52 Am. Bankr.L.J. 201, 207 (Summer 1978)). The inquiry does not focus on whether the debtor is making payments, but also considers if the debtor is minimizing expenditures, maximizing resources, and making efforts to attain employment. See id. at 541-42. If the debtor is not “negligent or irresponsible in his efforts to minimize expenses, maximize resources, or secure employment,” he or she passes the good faith test and discharge of the student loans is in order. Id. at 544.
If the debtor meets the mechanical undue hardship test only because they have negligently managed their affairs or were irresponsible, see id., (that is, if repaying the loan would not cause undue hardship if the debtor had acted in “good faith,” see id. at 542), 14 there remains a final chance to discharge the student loans. That requires passing the third test of the In re Johnson hat trick: the “policy test.” Id. at 542-44.
Under In re Johnson’s policy test, the court must examine the pros and cons of discharging the student loan(s) in light of the policy behind § 523(a)(8) and repealed 20 U.S.C. § 1087-3 (1978): “to combat the abuse of the bankruptcy laws by recently-graduated students.” Id. at 542. Thus, the court considered,
the amount of the educational debt, the percentage of the [debtor’s] total indebtedness which is composed of student loans, and the extent to which the debt- or’s college education has enhanced his earning capacity.
Id. at 543. If the court concludes either that “the dominant purpose of the bankruptcy petition was to discharge the student [loan] debt” or “the debtor has definitely benefit[t]ed financially from the education which the loan helped to finance,” it will not except the student loans from discharge. See id. at 544
b. The In re Brunner Test
The In re Brunner test, first articulated by the United States District Court for the Southern District of New York and adopted by the Second Circuit, determines that a student loan will be discharged for “undue hardship” if the debtor shows:
1) that the debtor cannot, based on current income and expenses, maintain a “minimal” standard of living for himself or herself and his or her dependents if forced to repay the loans, 2) that this state of affairs is likely to persist for a significant portion of the repayment period of the student loan, and 3) that the debtor has made good faith efforts to repay the loans.
In re Brunner I,
The district court required “some showing of ‘good faith’ ” as its test’s third prong, “following the lead” of
In re Johnson,
There is no specific authority for this requirement, but the need for some showing of this type may be inferred from comments of the Commission report. In discussing the discharge of loans after five years, when a showing ofundue hardship is no longer required, the Commission noted that such discharge is fair because the debtor may be unable to repay his or her debts due to “factors beyond his reasonable control.” If external circumstance were seen as justifying discharge after five years, it is likely that only such circumstances should be permitted to justify discharge prior to that time. The propriety of a requirement of good faith is further emphasized by the stated purpose for § 523(a)(8): to forestall students, who frequently have a large excess of liabilities over assets solely because of their student loans, from abusing the bankruptcy system to shed those loans. Thus it is proper to require a debtor to show that he or she has made good faith efforts to repay the loan and that the forces preventing repayment are truly beyond his or her reasonable control.
In re Brunner I,
The
In re Brunner
test has many adherents.
See, e.g., United Student Aid Funds, Inc. v. Pena (In re Pena),
c. The Totality of the Circumstances Test
Two circuit courts and numerous bankruptcy courts have preferred a “totality of the circumstances” test. The Eighth Circuit favored this approach early on, including in its review “an analysis of (1) the debtor’s past, present, and reasonably reliable future financial resources; (2) calculation of the debtor’s and his dependents’ reasonable necessary living expenses; and (3) any other relevant facts and circumstances surrounding that particular bankruptcy case.”
In re Andresen,
The Sixth Circuit also employs a totality of the circumstances approach. Recently, in
In re Hornsby,
it declined to “adopt any one test,” “instead looking] to many factors.”
One bankruptcy court in this circuit has expressly adopted the totality of the circumstances approach to undue hardship.
See In re Phelps,
The “totality of the circumstances” approach to undue hardship resonates in significant ways with
In re
Johnson’s “mechanical test” and the first two prongs of the
In re Brunner
test, examining the debtor’s income history, prospects for earned and unearned income, and expenses, with an eye to determining if the debtor can maintain a household while paying the student loan obligation.
17
As one court has recently commented: “Distilled to its essence, the court must examine the debtor’s current income and expenses and determine a ‘flexible minimal standard of living’ which is sensitive to the particular circumstances of each case through the application of common sense.”
See Salinas v. United Student Aid Funds, Inc. (In re Salinas),
2. Adopting a Test
I conclude that reviewing the “totality of the circumstances” is the best approach to assay “undue hardship” under § 523(a)(8). In doing so, I do not reject the In re Johnson and In re Brunner approaches outright. They have much in common with the tack I take. But In re Johnson and In re Brunner test too much.
The problem with applying separate “good faith” and “policy” tests is at least two-fold. First, many of the factors they take into account should, from the start, be incorporated into the totality of the circumstances analysis. To re-apply them as part of separate, second or third stage tests gives them undue emphasis. 19 Second, these second and third stage tests are without textual foundation. Rather than considering how the debtor’s education, aptitude, and effort might enable him or her to repay loans without undue hardship, rather than considering how legislative objectives might inform the content of the statute’s language, courts apply such tests, often in moralistic tones, to supplement the legislation. That is, in a word, inappropriate.
My task is to construe and honor the statute’s requirement that educational loans will be discharged only if their repayment presents a (post discharge) “undue hardship” for the debtor. To do so requires a principled determination of the requirement’s meaning and a careful review of the debtor’s circumstances.
If that task is tackled fairly, there is no need to apply separately-constituted “good faith” or “policy” tests. Here is why: Look at In re Johnson’s “good faith” test. It requires that the debtor show that he or she has made a bona fide repayment attempt. It considers whether the debtor has been “negligent” or “irresponsible” in managing personal finances and securing employment. What does such a test add to an informed totality .of the circumstances review? If responsible conduct will alter the debtor’s circumstances to render the repayment burden not “undue,” why should the court embark on a separate “good faith” inquiry? Analysis of the debtor’s pre-bankruptcy repayment efforts and repayment history, an aspect of the Johnson test shared with Brunner, has historical roots in the time when student loans were automatically rendered dis-chargeable in bankruptcy when they had been due and unpaid for five, later seven, years. Courts were then concerned that a debtor who chose bankruptcy before five or seven years expired and sought “undue hardship” discharge within that period might not yet have given repayment efforts a chance. That time is past.
WTiether a debtor files for relief and seeks discharge the day after graduation or ten years later, educational loans will be discharged only on a showing of “undue hardship,” a notion that necessarily concentrates on present circumstances and future conduct, not on the past. Of course, this is not to say that the debtor’s education, past earnings, and past repayment efforts are utterly irrelevant. They often
The
Johnson
“policy” test is also flawed. The policy adopted by Congress is embodied in the statute’s “undue hardship” requirement. Why interpret and apply the statute’s language, the end
'product
of legislative policy, only to proceed next to apply a nonstatutory test based on a court’s intimation of what more (than what the statute states) that policy means.
20
Of course, such factors as the economic advantage the debtor might reap from his or her education properly inform
3. The Extent of Hardship Required
In the end, my inquiry into the totality of Kopfs circumstances must come home to roost with the determination of whether she would experience “undue hardship” should the loans be excepted from her discharge.
Many have held that, after applying its chosen test, a court must conclude that the hardship goes beyond the ordinary hardship of a debtor in bankruptcy.
See, e.g., In re Pena,
Many courts focus on the predicted length of the hardship.
See In re Brunner II,
Some courts have held that the hardship must be truly severe and prolonged to warrant discharge.
See Wetzel v. New York State Higher Educ. Servs. Corp. (In re Wetzel),
In dictum the First Circuit has suggested only that the “hardship alleged ... must be undue and attributable to truly exceptional circumstances, such as illness or the existence of an unusually large number of dependents.”
TI Federal Credit Union,
There are courts, however, that view the requisite hardship as more mundane. Two have recently concluded that the hardship inquiry is whether the debtor has adequate resources to repay the loan and maintain a minimum standard of living.
See In re Peel,
For the most part, I subscribe to the latter view. To conclude that the debt- or must demonstrate something approaching a “certainty of hopelessness” or “total incapacity” would be to sacrifice the notion of “fresh start” at the altar of “undue hardship.” However, insofar as any of the cases in this category reject the necessity of a fair, fact-based prognostication of the debtor’s future circumstances, I part company with them. As mentioned earlier, “undue hardship” is, necessarily, a forward-looking concept.
Taking into account the policy underlying § 523(a)(8) (that is, considering legislative goals to inform the term’s content), it is fair to conclude that demonstrating un
From the statutory requirement that a debtor prove “undue hardship” one must infer that some measure of post-bankruptcy hardship may well be due. The character and extent of such hardship as debtors should be expected to endure in consequence of undischarged student loans (e.g., taking on a second job, relocating to a place with improved employment prospects, tightening the budgetary belt), is a case-specific calculation, a function of the totality of the circumstances before the court.
See In re Williams,
F. Applying the Totality of the Circumstances “Undue Hardship” Test to Kopfs Circumstances
At best a nettlesome task, my undue hardship determination in this case is all the more prickly because of gaps and inconsistencies in the spare, stipulated record. 25 Kopfs presentation is hardly tailored to an effective showing under any of the commonly accepted “undue hardship” tests.
1. Past, Present, and Future Income
Kopfs current take-home pay, minus taxes, is $306.44 per week. She has worked for a year and a half as an administrative assistant for “Island Music.” According to her federal tax returns, in 1998 she earned $17,994 gross income, a sum that includes just under $2000 in unemployment compensation. 26
Kopfs statement of financial affairs also reveals that in the two years preceding her bankruptcy petition she thrice received unemployment compensation: $1183, $981, and $1500.
On one hand, her average income may be overstated by this calculation because there is no downward adjustment to account for the probability that she earns no paid vacation or sick time. On the other hand, her 1998 tax return reveals a $2265.90 federal tax refund, and her Financial Statement to the Department of Educations reveals a 1998 $298 state tax refund. Her total federal tax liability for 1998 was $325.00, well under what the $33.49 that is deducted from Kopfs weekly wages would aggregate. I conclude that $306.44 per week is an accurate, if not precise, statement of her current income.
With respect to assets, Kopfs February 10, 1999, bankruptcy schedules tell of few, netting $15,415. She scheduled her 1987
The uncontroverted July 1, 1999, financial statement Kopf submitted to the Department indicates that she does not anticipate receiving anything of value from a lawsuit; is not a trustee, executor, or administrator of an estate; is not holding money for another; and expects no inheritance.
2. Reasonable Necessary Living Expenses
Kopfs $1262 monthly budget is comprised of reasonable and necessary expenses. She currently pays $326 per month for rent. She lives in subsidized housing and, should her income increase, so too will her rent.
She carries no auto loan, paying $80.00 for transportation expenses and $26.00 per month for auto insurance. Her 1987 Toyota has 170,000 miles on it. Given the age and wear on the car, she anticipates that the time is not far off that she will face additional transportation expenses, yet her budget provides no fund either for repairs or for a new car.
Kopf currently spends $340 per month in daycare expenses for her five-year-old son. (Her 1998 tax return indicates that she paid an average of $227 a month.) She attests that her day care expenses will fall to $302 per month next year when her son begins to attend school, but asserts that this savings will be offset by a $35 per week reduction in income, a consequence of her anticipated absence from work to take her son to school.
Otherwise, her budget reveals the following monthly expenses: $200 for food, $115 for electricity and fuel, $30 for telephone, $50 for clothing, $25 for laundry, and $30 for “recreation, clubs and entertainment, newspapers, magazines, etc.” She has no health insurance, but assigns $40 per month for medical and dental expenses.
On the bare numbers presented (and ignoring the unfunded expenses mentioned above), Kopfs budget is about $66.00 in the black each month.
S. Other Circumstances
Kopf has produced no evidence of other circumstance that color, in black or red, her prospects for repaying her student loans. Hers appears to be a household holding steady at two members. Though her bankruptcy schedules revealed substantial medical bills, she offers no evidence of ongoing health problems. She proffers nothing to indicate whether any condition or circumstance (medical, family, social, emotional) impedes her employment prospects. Nor has Kopf provided any information concerning what employment prospects exist for her or are foreclosed. She has submitted no proof anent her job skills beyond the fact that she is putting them to work in retail and that they qualify her as an “administrative assistant.”
Though Kopf apparently spent at least two and one half years in undergraduate school, she has said nothing about prospects for completing her education (or why she is incapable of doing so). She has provided no evidence regarding how such education she has attained will aid her or not in bettering her straits.
Simply put, Kopfs proof is geared exclusively toward the here-and-now. 27
Conclusion
For the reasons set forth above, judgment will enter for the defendants. Ms. Kopfs student loans will not be discharged.
A separate order consistent with this opinion shall enter forthwith.
Notes
.This memorandum sets forth my conclusions of law in accordance with Federal Rule of Bankruptcy Procedure 7052 and Federal Rule of Civil Procedure 52. ' Although the basic facts are stipulated, my decision is based on additional facts logically drawn from the stipulated record.
See, e.g., Brandt v. Repco Printers & Lithographies, Inc. (In re Healthco Int'l, Inc.),
Unless otherwise indicated, all citations to statutory sections are to the Bankruptcy Reform Act of 1978 (“Bankruptcy Code” or “Code”), as amended, 11 U.S.C. § 101 et seq.
. An ilem-by-item breakdown of Ms. Kopfs expenses is set forth infra as I apply the law to the facts.
. It appears from the loan account print-outs, incorporated as part of the stipulated facts, that Kopf made a $10.00 principal payment prior to July 26, 1989. There is no information in the record regarding the current account balance or projected monthly payment obligation. Kopf scheduled the Department of Education as holding a claim of $14,-761.82.
.Some courts employ a "shifting burdens” model for § 523(a)(8) litigation.
See Perry v. Student Loan Guarantee Found. of Arkansas (In re Perry),
. The government’s argument overlooks at least one recently-enacted discharge exception that operates as a function of a debtor’s post-bankruptcy "ability to pay.” See § 523(a)(15)(A).
. The 1998 amendment to § 523(a)(8) eliminated subsection (A), which removed from the discharge exceptions loans that "first became due more than 7 years (exclusive of any applicable suspension of the repayment period) before the date of the filing of the petition.” § 523(a)(8)(A)(repealed October 7, 1998).
See, e.g., Rudnicki v. Southern College of Optometry (In re Rudnicki),
.The Joint Explanatory Statement of the Committee of Conference for the Higher Education Amendments of 1998 stated:
The conferees, in the effort to ensure the budget neutrality of this bill, adopted a provision eliminating the current bankruptcy discharge for student borrowers after they have been in repayment for seven years. The conferees note that this change does not affect the current provisions allowing any student borrower to discharge a student loan during bankruptcy if they can prove undue economic hardship. The conferees also note the availability of various options to increase the affordability of student loan debt, including deferment, forbearance, cancellation and extended, graduated, income-contingent and income-sensitive repayment options.
H.R. Conf. Rep. No. 750 (1998), U.S.Code Cong. & Admin. News p. 404.
Courts applying the 1998 amendment have assumed that the meaning of “undue hardship” is unaffected by the elimination of the seven-year limitation on nondischargeability.
See, e.g., Great Lakes Higher Educ. Corp. v. Brown (In re Brown),
Although the two subsections of former § 523(a)(8) are generally described as two discrete exceptions,
see TI Federal Credit Union v. DelBonis,
. Reducing the monthly obligation to "zero,” will only postpone repayment indefinitely and, unless interest is abated, permit additional interest accruals.
. Frankly, if financial hardship were eliminated from the § 523(a)(8) analysis, one would be hard pressed to identify what sort of hardship would be left to consider. Physical or mental disabilities may play a role in the . calculus, but, generally speaking, their significance is in how they translate to an inability to repay debt. Would it not be inappropriate for a disabled millionaire to seek discharge of student loans on account of a disability that . created only nonfinancial hardship?
See, e.g., Barrows v. Illinois Student Assistance Comm’n (In re Barrows),
. As discussed in the context of the merits and demerits of the rival tests below, most courts have looked to the statutory history of the "undue hardship” student loan provision for guidance.
See, e.g., In re Lohman,
Without much attention to the propriety of looking beyond the Congressional product for the meaning of "undue hardship,” the
In re Brunner I
court, and many courts following its footsteps,
see, e.g., In re Lohman,
The cited portions of the 1973 report commented on the "rising incidence of consumer bankruptcies of former students motivated primarily to avoid payment of educational loan debts” and a concern that the trend would continue. Report of the Commission on the Bankruptcy Laws of the United States, House Doc. No 93-137, Pt. I, 93 Cong., 1st Sess. (1973) at 140 n. 14. The Commission recommended the insertion of a separate student loan exception to discharge "to provide for limited nondischargeability of educational loan debts” and cited two reasons:
First, a loan or other credit extended to finance higher education that enables a person to earn substantially greater income over his working life should not as a matter of policy be dischargeable before he has demonstrated that for any reason he is unable to earn sufficient income to maintain himself and his dependents and to repay the educational debt. Second, such a policy cannot be appropriately carried out under any other nondischargeability provision.... [Other nondischargeability provisions] neither provide for nondischargeability of debts incurred honestly which the debtor subsequently decides not to pay nor distinguish between persons scheduling educational debts who, under the general "fresh start” policy of the proposed Act, should and those who should not be enabled to discharge them.
Id. atn. 15.
In contrast to the enacted "or” construction between former subsections § 523(a)(8)(A) and (B), the Commission suggested an "and” construction, excepting from the discharge,
any educational debt if the first payment of any installment thereof was due on a date less than five years prior to the date of petition and if its payment from future income or other wealth will not impose an undue hardship on the debtor and his dependents^]
Id. at 136 (emphasis added).
The Commission propdsed a test for determining "undue hardship”:
In order to determine whether nondis-chargeability of the debt will impose an "undue hardship” on the debtor, the rate and amount of his future resources should be estimated reasonably in terms of ability to obtain, retain, and continue employment and the rate of pay that can be expected. Any unearned income or other wealth which the debtor can be expected to receive should also be taken into account. The total amount of income, its reliability, and the periodicity of its receipt should be adequate to maintain the debtor and his dependents, at a minimal standard of living within their management capability, as well as to pay the educational debt.
Id. at 140-41 n. 17.
As proposed by the Commission, the exception to otherwise matter-of-course student loan discharge was "limited.” Under no circumstances would the exception persist beyond five years and it would only apply in the
. As discussed
In re Green
and
In re Faish,
there is also the “Bryant Poverty Level Test.” If the debtor falls below the federal poverty level, an "undue hardship” discharge of the student loans is in order.
See Bryant v. Pennsylvania Higher Educ. Assistance Agency (In re Bryant),
. The First Circuit has not yet addressed undue hardship issues. Its only § 523(a)(8) decision holds that federal credit unions are "governmental units" for purposes of § 523(a)(8).
See TI Federal Credit Union,
.The court examined a "paucity of cases” interpreting 20 U.S.C. § 1087-3 (1978), a non-Code student loan nondischargeability provision containing a similar "undue hardship” provision.
In re Johnson,
. The court also described this as "self-imposed hardship.” Id. at 542
. For the propriety of requiring good faith efforts to repay and a showing nonpayment for reasons "truly beyond” the debtor's control
In re Brunner I
cites
Rappaport v. Orange Savings Bank (In re Rappaport)
The Second Circuit brushed over this prong of the lower court’s analysis, noting only that the debtor had not made an effort to repay and that she had not sought deferment.
See In re Brunner II,
. Bankruptcy courts elsewhere have embraced this approach,
see Clark v. United Student Aid Funds., Inc. (In re Clark),
. It is also very much like the Commission's articulation of undue hardship. See supra note 7.
. In this respect
In
re
Faish
places the
In
re
Brunner
form over the Code's substance, stating: "Equitable concerns or other extraneous factors not contemplated by the
Bninner
framework may not be imported into the court’s analysis to support a finding of dis-chargeability.”
In re Faish,
. To take it a step further, if a factor cannot be taken account of in a principled undue hardship assessment, it should not be considered a material factor at all.
. Courts taking this route have, in a sense, squared § 523(a)(8) — multiplying it by itself— rather than recognizing that the "undue hardship” provision is, in and of itself, the limit on student loan dischargeability. In doing so, many have relied on sources far less reliable than mill run legislative history.
In re Johnson
formulated its "good faith” and "policy” tests relying on such things as a letter from the President of the Massachusetts Higher Education Assistance Corporation to a congressman and the remarks at the Bankruptcy Revision Hearing of the attorney for the American Council on Education.
See In re Johnson,
In re Lohman,
cited favorably by the First Circuit in
TI Federal Credit Union,
Sure enough, "undue hardship” is an opaque concept, but many courts reach too far trying to clarify it. Legislative interpretation is a less expansive exercise. As Justice Holmes once observed, "We do not inquire what the legislature meant; we ask only what the statute means.” Oliver Wendell Holmes, Jr.,
The Theory of Legal Interpretation, in, The Essential Holmes
296, 299 (Richard A. Posner ed., 1992).
See also In re Hospitality Assocs. of Laurel,
As Justice Field wrote in
Soon Hing v. Crowley,
And the rule is general, with reference to the enactments of all legislative bodies, that the courts cannot inquire into the motives of the legislators in passing them, except as they may be disclosed on the face of the acts, or inferable from their operation, considered with reference to the condition of the country and existing legislation. The motives of the legislators, considered as to the purposes they had in view, will always be presumed to be to accomplish that which follows as the natural and reasonable effect of their enactments. Their motives, considered as the moral inducements for their votes, will vary with the different members of the legislative body. The diverse character of such motives, and the impossibility of penetrating into the hearts of men and ascertaining the truth, precludes all such inquiries as impracticable and futile.
. In an earlier decision Judge Johnson looked for “extraordinary circumstances” hindering the debtor’s fresh start as the singular "undue hardship” inquiry.
Nichols v. University of California (In re Nichols),
. Courts have interpreted the "undue hardship” requirement of § 523(a)(8) to be something less than the unconscionable standard governing discharge of HEAL Loans.
See, e.g. In re Mathews,
Although Congress has not defined the term "unconscionable” as used in § 292f(g), we have little doubt that in using this term it intended to severely restrict the circumstances under which a HEAL loan could be discharged in bankruptcy. We therefore conclude, as have other courts, that in employing the term "unconscionable,” Congress intended to adopt the ordinary usage of the term as "excessive, exorbitant,” “lying outside the limits of what is reasonable or acceptable,” "shockingly unfair, harsh, or unjust,” or "outrageous.” We find the standard imposed by this definition of "unconscionability” to be significantly more stringent than the “undue hardship” standard established for the discharge of educational loans under § 523(a)(8)(B)....
In re Rice,
. The Circuit also remarked that § 523(a)(8) should be taken as an "aberration[ ] from the norm,” "depart[ing] significantly from the lib'eral dischargeability policy manifested in the bankruptcy laws.”
TI Federal Credit Union,
.In a footnote the court reflected:
This Court questions the wisdom of denying a discharge to a debtor where the debtor’s income is insufficient to pay current expenses, and the future seems similarly bleak. As a practical matter, there is little, if any, societal benefit to be gained by such a course of action. The debtor remains unable to pay, and the student loan remains unpaid. Such a draconian result is at odds with not only the fundamental "fresh start” philosophy underlying the entire bankruptcy code, but the history of § 523(a)(8) as well.
. After an initial pre-trial conferences, the parties agreed that the best course for the adversary proceeding was to submit the matter to the court on a stipulated record and briefs. Upon review of these submissions the court initiated a further telephonic hearing to address some of the deficiencies and contradictions in the record. Subsequently, and with the Department’s consent, the debtor filed a supplemental affidavit. Though an evidentiary hearing may have benefitted Kopf, she rested her case on the written submissions.
. The tax filing does not accord with Statement of Financial Affairs which indicates that she earned $10,900 in gross wages from Island Music in 1998.
. Such data as relates to the future creates as many questions as it answers. For example: Why does Kopf contend that her son's enrolling in full-time school will cause her to miss five hours of work a week? There is no evidence that bus transportation is unavailable to her or that he suffers some special condition that precludes use of it.
. I have not been asked to consider fashioning a partial discharge, a point on which the courts are in disagreement.
Compare, e.g., United Student Aid Funds, Inc. v. Taylor (In re Taylor),
Finally, I have not been asked to stay such order as I may enter and "revisit” the question of undue hardship at a later time, a practice about which there is some debate.
See Cheesman v. Tennessee Student Assistance Corp. (In re Cheesman),