There are two options to discharge Tuition Answer Loans in bankruptcy:
1. Qualified education loan
A private student loan is a qualified education loan if it did not exceed your school’s cost of attendance. Your cost of attendance is the budget set by your school each semester.
Tuition Answer Loans were made directly to the borrower. The lender did not require school certification before making the loan. As a result, the lender often failed to confirm a borrower’s cost of attendance.
In student loan bankruptcy cases, Navient has the burden to prove your cost of attendance. If it can’t, then you may be able to discharge your Tuition Answer Loan without proving undue hardship.
Learn more about qualified education loans:
2. Undue hardship
If you do have to prove undue hardship, you’ll need to pass the Brunner Test.
(If you live in Arkansas, Iowa, Minnesota, Missouri, Nebraska, or the Dakotas, you’ll need to pass the totality-of-the-circumstances test.)
The Brunner Test asks three questions:
Based on your current income, can you maintain a minimal standard of living for you and your dependents while repaying your student loan debt?
Is your financial situation likely to stay the same for a significant portion of the repayment period of the student loans?
Have you made a good faith effort to repay your student loans?
The lack of repayment plans for Tuition Answer Loans combined with their variable interest rates and short loan terms makes proving undue hardship easier than proving the same for federal student debt.
Click here to learn How to File an Adversary Proceeding for Student Loans