U.S. Supreme Court

Florida Coastal law grad asking for discharge of $260K in federal student loans seeks SCOTUS review

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A lawyer representing a Florida Coastal law grad with about $260,000 in federal student loan debt believes there is a good chance the U.S. Supreme Court will grant certiorari in the bankruptcy case.

James Wilton of Ropes & Gray tells the US Law Week Blog that there is a circuit split on what constitutes an undue hardship that would allow federal student loans to be discharged in bankruptcy. The disparity is “exactly why we think” there is a good chance of a cert grant, Wilton said.

The St. Louis-based 8th U.S. Circuit Court of Appeals applies a more flexible “totality of the circumstances” test while the Chicago-based 7th U.S. Circuit Court of Appeals applied a stricter test in the case of Wilton’s client, Mark Tetzlaff.

“Unless you’re a quadriplegic from a car accident or you have Alzheimer’s disease” or another serious medical condition, “it’s going to be almost impossible to ever prove undue hardship in the 7th Circuit,” Wilton told the US Law Week Blog.

The cert petition (PDF) describes Tetzlaff as a 57-year-old man who is divorced and has been unable to find steady work since law school. He lives in Wisconsin with his elderly mother, who supports the household with her Social Security payments. He learned in September that he had failed the bar a third time, Wilton says.

As of February 2013, Tetzlaff had about $260,000 in federal student loan debt and about $19,000 in private student loan debt, the cert petition says. He also had nearly $76,000 in private nonstudent loan debt.

The cert petition says the student loans were used to pay for an MBA at Marquette University; classes at DePaul University College of Law, which awarded no degree; and a JD from Florida Coastal School of Law, from which he graduated in 2005.

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