News & Analysis as of

Educational Institutions Bankruptcy Code

Kramer Levin Naftalis & Frankel LLP

Second Circuit Affirms That Some Private Student Loans Are Dischargeable in Bankruptcy

In Hilal K. Homaidan v. Sallie Mae, Inc., Navient Solutions, LLC, Navient Credit Finance Corporation, Case No. 20-1981 (2d Cir. 2021), the Second Circuit affirmed the opinion of the U.S. Bankruptcy Court for the Eastern...more

BCLP

Senate Considers Bankruptcy Code Changes to Tackle Student Debt Crisis - and to Make Some Colleges Pay for It

BCLP on

As of May 2021, approximately 45 million Americans owe more than $1.7 trillion in student loan debt. For the arithmetically challenged, that means the average borrower has $38,000 in student loan debt....more

Pullman & Comley, LLC

First Circuit Holds that Parents' Payment of Tuition for an Adult Child Can Be Avoided as a Fraudulent Transfer: Colleges,...

Pullman & Comley, LLC on

Bankruptcy trustees continue to vigorously pursue actions in which they sue colleges, universities and other institutions of higher education to recover tuition payments made by parents for their children when the parents...more

Bradley Arant Boult Cummings LLP

First Circuit Holds that Parents’ Tuition Payments for Adult Children Are Fraudulent Transfers

Recently, the First Circuit held that a parent’s tuition payments on behalf of an adult child do not benefit the parent’s bankruptcy estate, and a Chapter 7 trustee may therefore claw the payments back as fraudulent...more

Moritt Hock & Hamroff LLP

Trustee Litigation Trend: Tuition Clawback

“An investment in knowledge always pays the best interest.” Benjamin Franklin, The Way to Wealth: Ben Franklin on Money and Success (1758). For parents paying their adult child’s college education costs, however, this...more

Tucker Arensberg, P.C.

Are College Tuition Payments Subject to Claw Back by Bankruptcy Trustees? - It Depends.

Tucker Arensberg, P.C. on

Bankruptcy Courts throughout the country are split on the socially charged issue of whether tuition payments made by parents for their adult children can be recovered by a bankruptcy trustee as “constructively fraudulent”...more

BCLP

SDNY Joins the Rush Party, Rules for Trustee in Another Child Tuition Clawback Case

BCLP on

We at the BCLP Global Insolvency and Restructuring Developments (the GRID) continue to watch and cover the growing jurisprudence of trustees seeking to recover pre-petition tuition payments made by a debtor parent to support...more

Jones Day

Bankruptcy Court Lacks Power to Substantively Consolidate Nondebtor, Nonprofit Entities With Archdiocese Debtor

Jones Day on

In the wake of scandal-driven bankruptcies filed by nearly 20 U.S. Roman Catholic dioceses and religious orders, scrutiny has been increasingly brought to bear on the benefits and burdens that federal bankruptcy laws offer to...more

Holland & Knight LLP

The Trend Reverses: College Tuition Payments Shielded from Avoidance in Bankruptcy - Bankruptcy Court Rules in Favor of University...

Holland & Knight LLP on

It is the start of a new semester, and all across the country, parents are writing tuition checks to the colleges and universities that their children attend. Colleges accept the checks on behalf of the students, the tuitions...more

Ballard Spahr LLP

Beating a dead horse: CFPB announces default judgment against Corinthian

Ballard Spahr LLP on

The CFPB announced that it has obtained a final default judgment against Corinthian Colleges, Inc. from the Illinois federal court in which it sued Corinthian in September 2014. In May 2015, Corinthian filed a petition under...more

Holland & Knight LLP

Reversing the Trend: Will Congress Act to Except College Tuition Payments from Clawback in Bankruptcy? - Congress Weighs...

Holland & Knight LLP on

A trend emerging in consumer bankruptcy cases around the U.S. is causing concern for many parents, students and undergraduate schools. As was reported by The Wall Street Journal in an article published on May 5, 2015, an...more

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