Complaint to Determine Dischargeability of Federal Student Loan Debt
Parties
1. Plaintiff-Debtor: Plaintiff-Debtor is a citizen of the United States. When the underlying bankruptcy case was filed, Debtor resided within the jurisdiction of this Court.
2. Defendant: Defendant U.S. Department of Education is a federal agency. For purposes of this public version, service-address details have been omitted. In an actual filing, service would be made on the Department of Education, the Attorney General of the United States, and the appropriate United States Attorney’s Office under the applicable rules.
Jurisdiction and Venue
3. This adversary proceeding is brought under 11 U.S.C. § 523(a)(8) and Rule 7001(6) of the Federal Rules of Bankruptcy Procedure.
4. This Court has jurisdiction under 28 U.S.C. §§ 1334(a)–(b) and 157(a). This is a core proceeding under 28 U.S.C. § 157(b)(2)(I).
5. Venue is proper in this District under 28 U.S.C. § 1409(a) because this adversary proceeding arises in and is related to a case under title 11 pending in this District.
Final Order Consent Statement
6. Plaintiff-Debtor consents to the bankruptcy court’s entry of final orders or judgment.
Nature of the Action
7. Plaintiff-Debtor seeks a determination that excepting his federal student loans from discharge would impose an undue hardship under 11 U.S.C. § 523(a)(8).
Factual Allegations
8. Plaintiff-Debtor is in his early forties. He earned an undergraduate degree in a social-work-related field from a public university and later earned a graduate social-work degree from a private university. He attempted the clinical social-work licensure exam once but did not pass. The multi-hour exam triggered significant anxiety, and he could not afford the supervised hours and fees required to retake it. He therefore never obtained a social-work license and could not work in the profession for which he trained.
9. Plaintiff-Debtor financed his education with federal student loans. He later consolidated multiple federal loans into Direct Consolidation Loans. Two consolidation loans were paid through a later consolidation. The remaining loans—the Direct Consolidated Unsubsidized Loan and Direct Consolidated Subsidized Loan—are his only federal student-loan obligations. As of the period shortly before this complaint, the unsubsidized consolidation loan was roughly $300,000, the subsidized consolidation loan was roughly $34,000, and the combined balance was roughly $334,000. Both loans accrue interest at approximately 6.25%.
10. Because he lacked a clinical license, Plaintiff-Debtor never worked in social work. For several years after graduate school, he accepted security-escort and warehouse jobs to support himself. After a family death and repeated storm damage to a former residence, he relocated to care for a parent. Local job prospects were limited. He later used an information-technology certification to obtain an entry-level IT position connected to secure federal work. To keep the position and maintain employment requirements, he commuted for several hours each way, resulting in substantial transportation costs and multiple vehicle accidents.
11. Despite the long commute, Plaintiff-Debtor maintained the IT job for several years and earned approximately $4,500 per month after taxes. His net pay barely covered rent, utilities, fuel, tolls, groceries, and other basic living expenses. He had no meaningful money left for savings or student-loan payments. He lost the job in 2024, and his vehicle was repossessed, leaving him without transportation and without income. Since then, he has applied for more than ten cybersecurity or IT positions with government contractors and related employers. Those applications were rejected before interview. He intends to pursue an advanced cybersecurity certification within the next several years and hopes to remain in the IT field, but he currently lacks funds for training.
12. Plaintiff-Debtor currently has no income and no health insurance. His necessary monthly expenses—rent, utilities, groceries, transportation, insurance, and personal items—exceed $6,000. He has no discretionary spending and allowed life-insurance policies to lapse when he could no longer pay the premiums. To reduce expenses, he plans to move in with family when his lease ends, eliminating rent and most commuting costs. Without a vehicle, his ability to attend job interviews is limited.
13. Plaintiff-Debtor owns no real estate, savings, or retirement accounts, and he has no outstanding credit-card or medical debts. He previously settled two credit-card balances and paid substantial accident-related and home-sale expenses. He has no payday loans and no remaining business debt. He also paid a family funeral expense from personal savings. He now relies on family for support.
14. Plaintiff-Debtor’s financial decline is tied to events outside his ordinary control. Over a period of roughly two years, repeated storms and flooding damaged his former residence. Insurance payments covered only part of the repair history, and later flooding left the property uninhabitable. Plaintiff-Debtor ultimately left the property and incurred additional costs when disposing of it. While caring for family, he tried to improve his finances by investing tens of thousands of dollars in a small-business or franchise opportunity. The business operator did not deliver the promised revenue-producing arrangement, and Plaintiff-Debtor paid ongoing expenses while interest accrued. He lost the investment and filed Chapter 7 in part to protect his employment prospects and security-related work eligibility.
15. Plaintiff-Debtor experiences symptoms consistent with trauma-related stress, anxiety, and depression. He reports difficulty concentrating, disrupted sleep, panic episodes, emotional exhaustion, and impaired decision-making. These symptoms affect his job search and his ability to retake licensure exams or pursue further education. He is willing to seek a low-cost evaluation but cannot afford treatment at present. The stress of insurmountable debt and unemployment aggravates these mental-health challenges.
16. After graduate school, Plaintiff-Debtor enrolled with a third-party student-loan debt-relief or consolidation company that promised to consolidate and service his loans. He made monthly and annual payments through the program for a period of time. The company was later accused of fraudulent practices. Plaintiff-Debtor’s loans defaulted and were transferred back to the Department of Education, and a later tax refund was intercepted to cover the default. He has no documentation of payments made through the company and never intentionally avoided repayment.
17. Plaintiff-Debtor has not enrolled in income-driven repayment or a federal loan rehabilitation program because he misunderstood eligibility and obligations. He is willing to request a payment estimate under SAVE or another income-driven repayment plan and to provide any documentation the Court or the Department of Education requires.
18. Plaintiff-Debtor’s last voluntary student-loan payment was around early 2020. Since then, he has been unable to pay because unemployment and basic living expenses have exceeded his income. He has not worked in social work since leaving school and sees no realistic path to reenter that field. He intends to remain in IT and hopes to rebuild his earnings, but additional certifications and experience are required.
19. Plaintiff-Debtor has no current income and only tenuous prospects for near-term employment. Even if he secures an IT role comparable to his prior position, his take-home pay would likely be insufficient to cover his basic living expenses and a meaningful student-loan payment. The cost and time required for additional certification are significant barriers. He has no dependents or child-support obligations and lacks a financial safety net. Without a discharge, the loans—totaling roughly $334,000—will continue to accrue interest.
20. Plaintiff-Debtor cannot maintain a minimal standard of living while repaying the loans. He currently has no income, and his necessary monthly expenses exceed $6,000. When he was working, his expenses consumed his entire paycheck. He has cut discretionary spending and is taking steps to reduce fixed costs by moving in with family.
21. Plaintiff-Debtor’s hardship is likely to persist for a significant portion of the repayment period. He lacks a social-work license, has lost his vehicle and independent housing, has untreated mental-health conditions, and faces an unstable job market. The failed business venture, repeated storm damage, and family obligations have long-term financial consequences.
22. Plaintiff-Debtor has made efforts to address the loans and his financial condition. He consolidated his loans, made payments through the third-party debt-relief company until the program collapsed, undertook a grueling commute to retain employment, and invested in a business opportunity to increase his income. He has applied for multiple IT positions and intends to pursue further certification. He acknowledges past missteps, including giving away money and not retaking the licensure exam, but those events occurred against a backdrop of grief, mental-health struggles, and attempts to help others. He is now willing to explore income-driven repayment and to provide documentation to the Department of Education. Despite these efforts, the debt has grown beyond his ability to repay.
Prayer
23. WHEREFORE, Plaintiff-Debtor respectfully requests that the Court enter judgment:
a. Determining that the loans are dischargeable pursuant to 11 U.S.C. § 523(a)(8) because repayment would impose an undue hardship on Plaintiff-Debtor;
b. Discharging all obligations on the loans, including accrued interest, penalties, and fees; and
c. Granting such other and further relief as the Court deems just and appropriate.
Respectfully submitted,
[Plaintiff-Debtor — address and phone omitted]