Last April, an Oregon judge ordered Portland State University to show cause why it shouldn’t be held in contempt for harassing a former student after bankruptcy.
Court records show the former student owed PSU unpaid tuition for classes in fall 2010. The University admits the former student never attended its classes, and University policy prohibited him from dropping them.
Rather than deny the harassment, PSU instead argued that its unpaid tuition was actually a “loan” that survived bankruptcy. Read the University’s response.
Student loans are often an exception to the fresh start provided by the Bankruptcy Code. Under § 523(a)(8), student loans are only discharged for borrowers facing undue hardships. Read more about how to wipe out student loans in Oregon bankruptcy courts.
In court, PSU’s attorney relied on its contractual language stating “if I am a student, any credit extended to me is an educational benefit or loan.”
In his motion, the former student cited court rulings from across the country that say unpaid tuition for unattended classes is not considered a student loan under the Bankruptcy Code. Read the former student’s motion for contempt.
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A preliminary hearing is set for July 6 in Portland Bankruptcy Court. Case No. 11-40345-tmb7.