Thursday, October 23, 2003

Student loan discharge reversed

In U.S. Department of Health & Human Services v. Great Lakes Higher Education Servicing Corp., the Fourth Circuit in an opinion by Judge Motz, joined by Judge King, with Judge Michael dissenting, reversed the district court's decision that student loan debt could be discharged based on unconscionability. The majority held that the district court applied an improper, too lenient standard in determining what was "unconscionable." Judge Michael concluded that even under the correct standard, the debtors should have been let off the hook.

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