Opinion
19-31372 Adv. 19-3078
02-03-2022
In re: BRIAN DAVID HASTINGS, Debtor. v. U.S. Department of Education, Defendant. Brian David Hastings, Plaintiff,
Chapter 7
DECISION GRANTING DEFENDANT UNITED STATES DEPARTMENT OF EDUCATION'S MOTION FOR SUMMARY JUDGMENT (DOC. 34)
Guy R. Humphrey, United States Bankruptcy Judge 1
I. Introduction
The Bankruptcy Code permits most student loan debts to be discharged only if repayment of the debt "would impose an undue hardship on the debtor and the debtor's dependents[.]" 11 U.S.C. § 523(a)(8). The Debtor, Brian Hastings ("Hastings"), asks this court to discharge his student loans because he believes he cannot repay them while maintaining a suitable standard of living. However, the evidence presented at summary judgment, even when viewed in the light most favorable to Hastings, does not suggest that his circumstances meet the high bar set by the undue hardship standard as explicated by the courts.
II. Factual and Procedural Background
Hastings filed a bankruptcy petition under Chapter 7 on April 29, 2019. Subsequently, on August 5, 2019, he filed the present adversary proceeding against the U.S. Department of Education (the "DOE") seeking discharge of his student loans. After conducting discovery, the DOE filed a motion for summary judgment on November 30, 2021. Hastings did not submit a response brief.
Hastings is 59 years old. Doc. 34, Ex. 1 at 12. He is presently married and has two adult daughters. Id. at 12-14; 16. Hastings' eldest daughter lives independently, but his younger daughter, age 20, lives at home and attends college while working on a part-time basis. Id. Hastings claimed his younger daughter as a dependent on his most recent tax return. Id. Hastings owns a home in Sidney, Ohio where he lives with his wife and younger daughter. Id. at 18. In 2005 he enrolled in a bachelor's degree program at Wright State University. After completing the program and obtaining the degree, Hastings began classes in the Master of Chemical Dependency Counseling program at the same institution but did not complete the program or obtain a master's degree. Id. at 19-21. It appears that he attended Wright State from approximately 2005 - 2016. Doc. 34, Ex. 2, ¶ 13. While a student, Hastings obtained a number of federal student loans that 2 were held by the DOE at the time of filing. Id. at ¶¶ 14-18. Because one or more new loans originate each semester, Hastings had multiple student loans outstanding as of the petition date. He consolidated his student loans into two direct consolidation loans on May 31, 2020. Id. at ¶ 25; doc. 34, Ex. 1 at 186; Attach. 3. Hastings presently owes more than $275,000 on his student loans. Doc. 34, Ex. 2, ¶ 16.
Hastings is currently employed as a General Manager at Auglaize Erie Machine where he earns $25 per hour and works 45 hours per week. Doc. 34, Ex. 1 at 26-27. Prior to the COVID-19 pandemic, he received quarterly bonuses of $3,000 per quarter but has not been paid any bonuses since the start of the pandemic. Id. at 28. Before beginning his current position at Auglaize Erie Machine in 2017 or 2018, Hastings worked as a plant manager at Midwest Specialties and earned $30 per hour. Id. Hastings left his position at Midwest Specialties because he disliked changes in his job and felt that the requirement that he travel extensively for work would not be manageable. Id. at 30. His wife works on a part-time basis as a dining room manager at a pizza restaurant. (Debtor's Schedule I). Hastings' younger daughter currently works as a part-time server at Red Lobster and studies at Ohio State University's Lima satellite campus. Id. at 18-19; 73. In the summer, she worked as a lifeguard. Id. at 81. She presently lives at home with her parents and uses her earnings to pay a portion of her college tuition, her car payment, and some of her own personal expenses. Id. at 83, 87-91, 113, 116-17. Hastings indicated that his daughter is saving money so she can begin living independently. Id. at 83-85. Hastings and his wife pay for their daughter's car insurance, gas, a portion of her college tuition, clothing and personal care items, and cellphone service. Id. at 87-90; 108-09; 112-13. They also provide her with a monthly allowance of $100, but it is unclear whether this is in addition to or inclusive of money for gas and clothing. (Debtor's Schedule J). His daughter has struggled with anxiety, depression, and other 3 mental health issues for which she requires a service dog, medication, and counseling. Id. at 44-45 and 172; doc. 37, Ex. 1-D at 7.
In 2020 Hastings earned approximately $63,500. Doc. 37, Ex. 1-G at 28. Combined with his wife's income, his total reported household income equaled $83,243. Doc. 37, Ex. 1-V at 20. The standard repayment terms for Hastings' student loans would require him to pay $1,838.45 per month for thirty years. Doc. 34, Ex. 2, ¶ 22. He is also eligible for an Income Driven Repayment REPAYE ("REPAYE") plan that would set his monthly payments at $419.19 for a 25-year term based on his 2020 adjusted gross income ("AGI") and family size. Id. at ¶ 36. The REPAYE plan payment would be subject to an annual reassessment of his household AGI and family size. Id. at ¶ 23. The parties have communicated about Hastings' options under the available IDR plans; however, he has indicated that he believes even the lowest payment available would require him to sell his house or significantly reduce other expenses. Doc. 34, Ex. 1 at 187-91.
The record also reflects that Hastings was told by the loan servicer during a telephone call that he was eligible for a monthly payment of $376. Doc. 35, Ex. 1 at 187-88.
Hastings did not begin making payments when his loans entered the repayment stage in 2016. Doc. 34, Attach. 3 at 85-91. From December 2018 to April 2019, Hastings made five payments of $5.00 each toward his student loan balance. Id. It is unclear from the record why he and his loan servicer agreed to this payment schedule, but it appears that the loan may have been in default. Doc. 37, Ex. 1-D at 11. In April 2019 Hastings' federal tax refund was applied toward his student loan balance involuntarily. Doc. 34, Attach. 3 at 85-91.
III. Legal Standard and Analysis
A. Jurisdiction
This court exercises jurisdiction pursuant to 28 U.S.C. § 1334(b) and the standing order of reference in the District Court for the Southern District of Ohio, Amended General Order 05-02. 4 This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I). This court has constitutional authority to enter final orders in this dischargeability adversary proceeding.
B. Summary Judgment Standard
A court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a) (made applicable in this adversary proceeding by Federal Rule of Bankruptcy Procedure 7056). A factual disagreement is genuine if "a rational trier of fact could find in favor of either party on the issue." SPC Plastics Corp. v. Griffith (In re Structurlite Plastics Corp.), 224 B.R. 27, 30 (B.A.P. 6th Cir. 1998) (citing Schaffer v. A.O. Smith Harverstone Prods., Inc., 74 F.3d 722, 727 (6th Cir. 1996)). A fact is material if it might affect the outcome of the suit under substantive law. Niecko v. Emro Mktg. Co., 973 F.2d 1296, 1304 (6th Cir. 1992) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). When reviewing a motion for summary judgment, a court views all evidence and draws all inferences in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
C. Student Loan Discharge in Bankruptcy
Student loans, as defined in § 523(a)(8)(A)-(B), are exempted from a debtor's standard discharge. See Barrett v. Educ. Credit Mgmt. Corp. (In re Barrett), 487 F.3d 353, 358 (6th Cir. 2007). Instead, student loan discharge is governed by § 523(a)(8) and must be determined separately in an adversary proceeding. See Fed.R.Bankr.P. 4007(a); 7001(6). Section 523(a)(8) provides in relevant part:
(a) A discharge under section 727 . . . of this title does not discharge an individual debtor from any debt-
(8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor's dependents, for-5
(A)(i) 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
(ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or
(B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual[.]11 U.S.C. § 523(a)(8). Thus, student loans are dischargeable in bankruptcy only when the debtor can show that repayment of the loans would impose an undue hardship on the debtor and the debtor's dependents. In the Sixth Circuit, courts apply the three prong Brunner test to determine whether repayment would impose an undue hardship. Under this standard, the debtor must demonstrate:
(1) that the debtor cannot maintain, based on current income and expenses, a "minimal" standard of living . . . if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans.Oyler v. Educ. Credit Mgmt. Corp. (In re Oyler), 397 F.3d 382, 385 (6th Cir. 2005) (quoting Brunner v. N.Y. State Higher Educ. Servs. Corp., 831 F.2d 395, 396 (2d Cir. 1987)). See also Nixon v. Key Educ. Res. (In re Nixon), 453 B.R. 311, 326 (Bankr. S.D. Ohio 2011) (same). Because Hastings bears the burden of proving all three elements by a preponderance of the evidence, the DOE must demonstrate, as a matter of law, that he cannot meet one or more of the three prongs of the Brunner test. See Kearney v. Navient Sol. (In re Kearney), Case No. 15-34200, Adv. No. 16-3024, 2017 Bankr. LEXIS 2022, at *11-12 (Bankr. S.D. Ohio July 14, 2017) (citing Connelly v. Deutsche Bank Nat'l Trust Co., 581 Fed.Appx. 500, 503 (6th Cir. 2014)) ("To meet such a burden on summary judgment, the moving party may point out to the district court that there is an absence 6 of evidence to support the nonmoving party's case."). The court will discuss each of the three Brunner prongs in turn.
1. Whether the Debtor Can Maintain a Minimal Standard of Living if Forced to Repay the Loans
The maintaining of a minimal standard of living does not require that the debtor live in poverty but may require the debtor to reduce or eliminate living costs or amenities in order to pay student loan creditors. See Clavell v. U.S. Dep't of Educ. (In re Clavell), 611 B.R. 504, 517 (Bankr. S.D.N.Y. 2020) ("[A] debtor is not required under Brunner to forego necessary and reasonable expenses, such as healthcare expenses, food, and a modest amount of recreation and entertainment that is incident to modern life."); Campton v. U.S. Dep't of Educ. (In re Campton), 405 B.R. 887, 891 (Bankr.N.D.Ohio 2009) ("While a minimal standard of living does not mandate that a debtor live in poverty to qualify for a discharge of their student-loan obligation, it does mean that the debtor is expected to do some financial belt-tightening and forego amenities to which he may have become accustomed."). Courts have determined the following elements generally constitute a minimal standard of living:
1. People need shelter, shelter that must be furnished, maintained, kept clean, and free of pests. In most climates it also must be heated and cooled.
2. People need basic utilities such as electricity, water, and natural gas. People need to operate electrical lights, to cook, and to refrigerate. People need water for drinking, bathing, washing, cooking, and sewer. They need telephones [and internet service] to communicate.
3. People need food and personal hygiene products. They need decent clothing and footwear and the ability to clean those items when those items are dirty. They need the ability to replace them when they are worn.
4. People need vehicles to go to work, to go to stores, and to go to doctors. They must have insurance for and the ability to buy tags for those vehicles. They must pay for gasoline. They must have the ability to pay for routine maintenance such as oil changes and tire replacements and they must be able to pay for unexpected repairs.7
5. People must have health insurance or have the ability to pay for medical and dental expenses when they arise. People must have at least small amounts of life insurance or other financial savings for burials and other final expenses.
6. People must have the ability to pay for some small diversion or source of recreation, even if it is just watching television or keeping a pet.Wallace v. Educ. Credit Mgmt. Corp. (In re Wallace), 443 B.R. 781, 787-88 (Bankr. S.D. Ohio 2010) (quoting Ivory v. United States (In re Ivory), 269 B.R. 890, 899 (Bankr. N.D. Ala. 2001)). Under this framework, it appears clear that Hastings has sufficient income to provide for a minimal standard of living while paying something on his student loans. The court notes that, in an email to the DOE, Hastings stated that a payment set at ten percent of his gross earnings would be acceptable to him. Doc. 36, Ex. 1-X at 30. Because a monthly payment at this rate would be around $540 per month, an amount higher than the REPAYE amount he was offered and declined as unaffordable, the court finds it unlikely that Hastings could successfully demonstrate an inability to repay at least some portion of his student loans while maintaining a minimal standard of living.
While Hastings believes that his monthly expenses leave him with a negative monthly balance, the detailed analysis of his accounts prepared by the DOE which he has not refuted demonstrates that this is not the case. Further, the analysis shows several areas of his monthly budget in which Hastings could reduce his spending while maintaining a minimal living standard. For example, the DOE produced evidence that Hastings pays for multiple TV streaming services in addition to a live TV subscription. The court does note that Hastings did attempt to reduce his TV expenses by switching from cable TV to a streaming provider. He also pays over $100 per month in pet expenses and spends some amount of money on other recreation and entertainment activities. While debtors are entitled to some modest spending on entertainment, the court is doubtful that Hastings could successfully argue that these collective expenses reflect a frugal lifestyle. Additionally, he contributes hundreds of dollars per month toward the living expenses 8 and college tuition of his adult daughter. By discharging his other debts in bankruptcy, Hastings also eliminated monthly payments that would otherwise have been due and should now result in funds that can be used to pay his student loan creditors. Considering this evidence, along with Hastings' own statement that he could pay 10% of his gross income toward his student loan debt, it appears unarguable that Hastings could pay at least some amount toward his student loans while maintaining a minimal standard of living by reducing expenses that fall outside the minimal living standard.
Hastings argues that he cannot sustain a minimal living standard if forced to repay his loans because he will be unable to repay them before he reaches the age of retirement, contribute additional funds to his retirement account, or pay for his daughter's college tuition. Doc. 1, ¶¶ 10-13. He also explains that he believes maintaining "a quality of life" is not possible while repaying his student loans. In support of this, he stated, in a response to an interrogatory from DOE counsel, that:
Mr. Hastings believes that the thing necessary for quality of life, are [sic] good health, comfort, and happiness. Living from pay check to pay check, robbing Peter to pay Paul is not good for his health, comfort or happiness. Mr. Hastings is now facing, on top of the new medical bill incurred in the late part of 2019, paying for his daughter's college education. Mr. Hastings figures that alone in his daughters first year he will have to pay somewhere between $2,000 and $4,000.00 for her education, depending on whether she receives some scholarships and the amount given from FSTA per semester.Doc. 37, Ex. 1-D at 6. However noble Hastings' goals, his inability to attain them if forced to repay his loans does not equate to undue hardship under the Brunner standard. See Logan v. N.C. State Educ. Assistance Auth. (In re Logan), 263 B.R. 796, 800 (Bankr. W.D. Ky. 2000) ("Professor Logan testified that she cannot repay the loans in the future because she believes it is her moral obligation to finance her children's college education. The Court notes that Professor Logan has no legal obligation to pay for her children's college education. The best thing she can do for her 9 children is to show them by example her extraordinary accomplishments and tenacity to improve her circumstances.").
However, the question remains as to whether the appropriate payment amount to consider under the first Brunner prong is the standard repayment amount of $1,838.45 per month or the $419.19 REPAYE amount. Courts are divided on whether the availability of income-based repayment options should be considered as part of the first prong or limited to the third prong good faith analysis. See e.g. Pierson v. Navient (In re Pierson), Adv. No. 17-3096, 2018 Bankr. LEXIS 3106, at *13-16, 2018 WL 4849658, at *4-6 (Bankr.N.D.Ohio Oct. 4, 2018); Greene v. U.S. Dep't of Educ. (In re Greene), 484 B.R. 98, 110 (Bankr. E.D. Va. 2012). A number of courts have declined to conclude that the availability of a monthly IDR payment of zero, based on the debtor's current income and household size, would prevent a debtor from meeting the first Brunner prong even though such a payment could not actually impact the debtor's ability to provide for a minimal standard of living. See e.g. Marshall v. Student Loan Corp. (In re Marshall), 430 B.R. 809, 814-15 (Bankr. S.D. Ohio 2010); Nightingale v. N.C. State Educ. Assistance Auth. (In re Nightingale), 529 B.R. 641, 650 (Bankr. M.D. N.C. 2015); Booth v. U.S. Dep't of Educ. (In re Booth), 410 B.R. 672, 677 (Bankr. E.D. Wash. 2009); Bell v. U.S. Dep't of Educ. (In re Bell), 633 B.R. 164, 181-82 (Bankr. W.D. Va. 2021). Courts have also noted that Congress made no indication that it intended for IDR programs to repeal § 523(a)(8) or for administrative IDR calculations to replace judicial analysis under the statutory undue hardship standard. See Barrett, 487 F.3d at 364 ("Had Congress intended participation in the ICRP-implemented in 1994-to effectively repeal discharge under § 523(a)(8), it could have done so."); Bell, 633 B.R. at 181 ("[T]he inquiry is not whether participation in a repayment program for twenty years for an ultimate forgiveness would be an undue hardship; the inquiry according to the Brunner test is whether repayment of the loan over 10 the repayment period would be an undue hardship."). The DOE has not argued that Hastings could afford to make the full loan payments or repay the full amount of the loans. The record suggests but does not establish that Hastings would be unable to do so while maintaining a minimal standard of living, but it is clear that he could make the monthly IDR payments under the REPAYE program at this time. Because the court finds that Hastings cannot meet the third prong of the Brunner test as a matter of law, it declines to resolve this question.
2. Whether Additional, Persistent Circumstances Beyond the Debtor's Reasonable Control Are Present
The second prong of the Brunner test requires the court to determine whether "additional circumstances exist that would persist for a significant portion of the repayment period." Marshall, 430 B.R. at 815. These additional circumstances must be beyond the debtor's reasonable control and indicate a "certainty of hopelessness [as to repayment of the debt], not merely a present inability to fulfill financial commitment." Oyler, 397 F.3d at 386 (quoting In re Roberson, 999 F.2d 1132, 1136 (7th Cir. 1993)). In assessing this prong, courts consider, among other things:
(1) whether or not there are any dependents in the Debtor's care; (2) the Debtor's level of education and the quality of that education; (3) the Debtor's lack of marketable job skills; (4) age or other factors that would prevent retraining or relocation in order to increase her income; (5) lack of assets; (6) underemployment; (7) number of years remaining in the Debtor's work life to allow repayment of the loan; (8) maximum income potential in the Debtor's chosen educational field; and (9) illness or incapacity.'"Randall v. Navient Sols. (In re Randall), 628 B.R. 772, 782 (Bankr. D. Md. 2021) (cleaned up); see also Barrett, 487 F.3d at 359 (applying similar factors). Based upon these factors, the court cannot determine at summary judgment whether any additional circumstances would prevent Hastings from making payments toward his student loan debt in the future. While he currently makes several monthly payments for post-petition medical procedures, there is no evidence that suggests either Hastings or his wife suffer from any medical conditions that impact their ability to 11 maintain employment or require unusual ongoing costs beyond monthly prescription medications. Hastings has no minor children in his care, and his adult daughter appears capable of employment and higher education studies. Even to the extent his daughter's medical needs require some level of temporary support, Hastings stated that he expects his daughter to live independently in the near future. Therefore, even if some of his expenses related to his daughter are permissible, they are unlikely to continue for any significant length of time. As to employment and income, Hastings holds a management position, and there is no evidence that he lacks the skills that may allow him to advance within his company or move to higher paying role elsewhere in the future.
However, the court understands that he is currently 59 years old and faces a lengthy repayment term. If he were to repay his loans under the REPAYE plan, he would make payments until he is approximately 83 or 84 years old. See Educ. Credit Mgmt. Corp. v. Blackbird (In re Blackbird), No. WW-07-1454-KJuKu, 2008 Bankr. LEXIS 4666, at *19, 2008 WL 8444793, at *6 (B.A.P. 9th Cir. July 11, 2008) ("Bankruptcy courts may look to the unexhaustive list of additional circumstances which includes: the limited number of years remaining in the debtor's work life to allow payment of the loan, age or other factors . . . .") (citation omitted). The court also recognizes that Hastings currently owes over $275,000 on his student loans, and that interest is accruing on these loans at 6.63% per year or approximately $50 per day. Even if he were to begin making the minimum payment, the interest accrual would steadily increase his loan balance. Because Hastings cannot meet the third prong of the Brunner standard, the court finds it unnecessary to determine whether the second prong can be met.
3. Whether the Debtor Demonstrated Good Faith Efforts to Repay the Loans
The third prong of the Brunner test requires the debtor to affirmatively demonstrate that he has made a good faith effort to repay the loans. Barrett, 487 F.3d at 359. Courts commonly use the 12 six Flores factors as a guide to evaluate good faith efforts, and the court finds it useful to examine Hastings' efforts to repay under this framework:
(1) was the debtor's failure to repay a student loan obligation truly because of factors beyond her reasonable control;
(2) has the debtor realistically used all available resources to repay the debt;
(3) is the debtor using her best efforts to maximize her earning potential;
(4) how long after the loan first became due did the debtor seek to discharge the debt;
(5) what is the percentage of student loan debt in relation to debtor's total indebtedness; and
(6) has the debtor obtained any tangible benefit from the student loan obligations.Fields v. Sallie Mae Servs. Corp. (In re Fields), 286 Fed.Appx. 246, 249-50 (6th Cir. 2007) (quoting In re Flores, 282 B.R. 847, 856 (Bankr.N.D.Ohio 2002)); see also Educ. Credit Mgmt. Corp. v. Frushour (In re Frushour), 433 F.3d 393, 402 (4th Cir. 2005) (applying similar factors).
A different section of the In re Flores decision was subsequently abrogated on other grounds by Miller v. Penn. Higher Educ. Assistance Agency (In re Miller), 377 F.3d 616 (6th Cir. 2004) (holding that bankruptcy courts may not employ § 105(a) equitable power to partially discharge loans when the debtor does not meet the § 523(a)(8) undue hardship standard).
Here, the record shows that Hastings never made any real effort to use his available financial resources to make payments on his student loans. After concluding his studies without completing his master's degree program, Hastings did not begin making payments. Further, he has not suggested that he, at any time after leaving school, contacted his loan servicer or the DOE to discuss his options or to request a payment plan if he believed his monthly loan payment would be unaffordable. See Floyd v. Educ. Credit Mgmt. Corp., 54 Fed.Appx. 124, 126 (4th Cir. 2002) (discussing a debtor's frequent contact with his loan servicer as indicative of good faith). He never voluntarily contributed any portion of a tax refund or bonus toward his student loans. Indeed, the record indicates that Hastings never attempted to address his student loan at all and only began 13 making de minimus payments of $5 per month after his student loan servicer contacted him, more than two years after his loans entered repayment, because his loans were in default. He has not suggested he made efforts to repay his loans or ever planned to do so.
In addition, despite having a stable household income, Hastings did not pursue any of the several IDR plans offered by the Department of Education, each of which offer borrowers single monthly payments based on their income and household size, at any time prior to seeking discharge of his student loans. While participation in an IDR plan is not a definitive indicator of a lack of good faith, a borrower's decision not to pursue an IDR plan is probative of his intent to repay his loans. Fields, 286 Fed.Appx. at 250 (quoting Tirch v. Penn. Higher Educ. Assistance Agency (In re Tirch), 409 F.3d 677, 682 (6th Cir. 2005)); Educ. Credit Mgmt. Corp. (In re Mosko), 515 F.3d 319, 326 (4th Cir. 2008) ("[S]eeking out loan consolidation options is an important component of the good faith inquiry because such efforts demonstrate that the debtors take their debts seriously and are doing their utmost to repay them despite their unfortunate circumstances.") (cleaned up). Here, the court considers Hastings' apparent failure even to investigate possible IDR plans when he believed himself unable to pay the full monthly amount to be probative of his lack of serious intent to ever repay his student loans. The court also cannot conclude that Hastings is maximizing his earning potential given that he recently took a voluntary pay reduction of at least $20,000 by changing jobs. For these reasons, the court finds that Hastings cannot satisfy the third prong of the Brunner test as a matter of law. 14
It appears from the record that Hastings did investigate IDR plans and may have submitted an IDR application during the pendency of this adversary proceeding at the suggestion of counsel for the DOE.
Hastings did not file a response brief in opposition to the DOE's motion for summary judgment or submit any evidence rebutting the documents and statements offered by the DOE. Because of this, the court concluded, based on the limited record before it, that a reasonable trier of fact could only conclude that Hastings largely ignored his student loan debt until the time that he filed the present adversary proceeding.
D. Post-Petition Loan Consolidation
The DOE asserts that, because Hastings consolidated his student loans after the petition date, the consolidated loan is a new, post-petition debt and, therefore, may not be discharged through this adversary proceeding since only prepetition debts are subject to discharge in a Chapter 7 case. The court notes from the record that the DOE, through its attorney, repeatedly urged Hastings to apply for an IDR plan but did not disclose that consolidating the loans, a necessary part of the IDR application process, could result in a new, post-petition debt with the potential to moot this dischargeability proceeding. The court is aware that when student loan borrowers apply for IDR plans, they virtually always consolidate their loans into a single loan in order to qualify for a single IDR plan payment based on their income. Because the court finds that Hastings cannot meet the standard for discharge of his student loans, the court declines to address this argument.
See "Student Loan Consolidation," Federal Student Aid, https://studentaid.gov/manage-loans/consolidation, accessed Jan. 20, 2022. ("A Direct Consolidation Loan allows you to consolidate (combine) multiple federal education loans into one loan. The result is a single monthly payment instead of multiple payments. Loan consolidation can also give you access to additional loan repayment plans and forgiveness programs.")
IV. Conclusion
Accordingly, the court grants summary judgment in favor of the defendant, the U.S. Department of Education, and finds that Mr. Hastings' student loans are not dischargeable. The court will contemporaneously enter a separate order consistent with this decision. 15