Bankr. Case No. 16-12372-7
Debtor filed a motion for sanctions against University of Wisconsin-Stout for violating the final discharge order in her chapter 7. Debtor had enrolled in Stout in 2008 and signed a Payment Plan which allowed Debtor to register for classes and defer full payment of her tuition. Debtor took classes and qualified for a degree, but never paid her tuition. She subsequently filed for a chapter 7 and received a discharge. The issue before this Court was whether the unpaid tuition constituted a “loan” under 11 U.S.C. § 523(a)(8). The Court determined the Payment Plan was a loan. The Court looked to the common law definition of a loan, which is (1) a contract, whereby (2) one party transfers a defined quantity of money, goods, or services, to another, and (3) the other party agrees to pay for the sum or items transferred at a later date. Additionally, the Court dismissed the notion that a formal exchange of money is required to constitute a loan. Although money never changed hands between Debtor and Stout, the transaction was clearly understood to be a student loan, so the motion for sanctions was denied and the loan was deemed nondischargeable.
11 U.S.C. § 523(a)(8) -- Nondischargeability - student loans
20 U.S.C. § 1087II -- Cost of attendance
26 U.S.C. § 221 -- Interest on education loans
DEFERRED PAYMENT PLAN