In this bankruptcy appeal, the Department of Education (“DOE”) asks the court to reverse the bankruptcy court’s decision to discharge Debtor’s student loans. As acknowledged by the bankruptcy judge in his thorough opinion, this is a close case and a difficult decision.
On October 26, 2015, Price filed a Chapter 7 petition for bankruptcy in a United States Bankruptcy Court. Although the bankruptcy court granted the petition for a discharge under 11 U.S.C. § 727 in 2016, prior to the actual entry of this order on the bankruptcy docket Debtor initiated an adversary proceeding seeking to discharge her student loans under 11 U.S.C. § 523(a)(8). The bankruptcy court held a trial on the adversary proceeding in November 2016. Just over half a year later, the bankruptcy court ruled that the student loans were dischargeable under section 523(a)(8).
The DOE timely appealed the bankruptcy court’s ruling to this court on July 10, 2017. The DOE filed a brief in support of reversing the bankruptcy court’s decision on October 13, 2017. Debtor filed her brief on November 13, 2017, and the DOE filed a reply brief on November 27, 2017. The court heard oral argument on December 6, 2017. This court has jurisdiction and the matter is now ripe for adjudication. See 28 U.S.C. § 158(a).
During the adversary proceeding, the following relevant facts were presented: In 2011, Debtor graduated from Thomas Jefferson University with a bachelor’s degree in Radiologic Science. To attend Thomas Jefferson, the Debtor obtained private and federal student loans. She owes the DOE $25,971.85 on her federal loans. The monthly repayment on the loan was between $277 and $284 per month.
Debtor’s financial troubles likely began when she separated from her husband in August of 2015. While neither Debtor nor her husband have filed for divorce, they live in separate homes. As a result of this separation, and Debtor’s need to find housing on her own, she currently runs a monthly deficit and borrows money from her mother to break even each month. Neither Debtor nor her mother keeps a record of how much money she has borrowed, and she pays back her mother out of her income tax refund each year.
Debtor’s degree in Radiologic Science enabled her to sit for licensing examinations in vascular sonography and general sonography. She passed her vascular sonography examination in 2013, but failed her general sonography examination. Debtor cannot retake her general sonography examination unless she goes back to school and obtains additional education.
Debtor works twenty hours a week as a vascular sonographer at Main Line Health where she is paid $34.22 per hour. In the hours when Debtor is not working, she watches her three children, two of whom are not yet in school and require full time day care on the days she works. Additionally, because Debtor’s husband does not have suitable housing, the children live with her. Debtor and the children live in a home owned by her mother where she pays $1,400 a month in rent—an amount that is below-market.
Debtor’s monthly take-home pay is $2,405.00. She receives $1,400 per month in court-ordered child support from her estranged husband. Her husband also pays $507.05 per month to cover the car payment, and car and renter’s insurance. Debtor also receives health insurance through her husband. All in all, the bankruptcy court found that Debtor has $4,312.00 available to cover her monthly expenses of $4,482.00. Thus, she is running a monthly deficit of $170.00.
Debtor has apparently been unable to obtain additional hours at Main Line Health and has been unsuccessful in her search for a full time position elsewhere. Based on Debtor’s testimony at trial regarding her experiences attempting to gain full time employment as a vascular sonographer, the bankruptcy court found that the vascular sonography field is overcrowded and it is difficult for a vascular sonographer in this area to find full time employment. Additionally, based on Price’s testimony, the bankruptcy court found that the full time vascular sonographers at Main Line Health are not scheduled to retire until 2025. Id. at 10.
Debtor has not sought part-time, lower-paying employment in another field because she is experiencing a childcare squeeze. Because her two youngest children are not in full time school, she will have to pay for childcare for any additional hours she works. She testified that if she worked full time her childcare expenses would go up $600 dollars a month.