Student Loans May Now Be Discharged Easier

On May 22, 2013, the 9th Circuit Court of Appeals released its opinion in Hedlund v. The Educational Resources Institute, Inc., and Pennsylvania Higher Education Assistance Agency, Case 12-35258 (D.C. 6:11-cv-6281AA). That opinion (and other pending decisions) may have made it a little easier on student loan debtors to have their student loans discharged in bankruptcy.

While this case was decided in the 9^th Circuit, Kansas, part of the 10^th Circuit, also uses the Brunner test in determining the dischargeability of student loans. This case could be cited to strengthen a debtor’s position that their student loans should be discharged. Missouri is part of the 8^th Circuit, which uses the “Totality of the Circumstances” test, which is must less strict than the Brunner test, so again, this case could be used to strengthen a debtor’s dischargeability argument.