District Court Upholds Discharge of a Portion of Student Loan Debt

A district judge in Kansas upheld a decision handed down last year by Bankruptcy Judge Robert E. Nugent of Wichita, Kan., who ruled that a bankruptcy court has authority to discharge interest on a student loan while leaving the principal intact. In his May 2 opinion, District Judge John W. Broomes also held that a discharge under Section 523 (a)(8) is not an “all or nothing” proposition. If the court decides that payment of part of a student loan results in undue hardship, the judge is not required to discharge the entire loan.

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