When is a Student Loan Not a Student Loan

As you probably already know, student loans aren’t dischargable in bankruptcy absent a separate discharge proceeding for the student loan. But like everything else, what make a debt a student loan is all in the details.

First off, Federal student loans are always student loans for bankruptcy purposes. So if it was a Stafford or a Plus loan, those are always going to be student loans to the Bankruptcy Court.

If your debt is a private student loan, then we need to investigate further. To be classified as a student loan in bankruptcy, a debt must be a “qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986.” On of the requirements of that section is that debt is for a “eligible educational institution.” (For earlier years, google ” Federal School Code List” and the year). So if the school was not a “eligible educational institution” at the time you took the courses, it does not qualify for student loan protections in bankruptcy.

Attorney Richard Gaudreau goes over it here.

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