Case Summary:
Debtor’s father filed an adversary proceeding to determine dischargeability of debt. Debtor’s father had taken out a loan, secured by his principal residence, and then loaned the funds to his daughter to refinance her student loans. The Court held that nondischargeability was not warranted under § 523(a)(8)(A)(ii) because loans are not included within the purview of the section. While some courts have allowed loans to be classified under § 523(a)(8)(A)(ii), the Court found that the section, which refers “to educational benefit, scholarship, or stipend” contemplated payments of a different nature than loans, and that the inclusion of loans within the section would render the remainder of § 523(a)(8) superfluous.

Statute/Rule References:
11 U.S.C. § 523(a)(8) -- Nondischargeability – Student Loans

Key Terms:
Student Loan