The Supreme Court today declined the opportunity to clarify the test for determining whether a debtor has met the undue hardship standard for purposes of student loan discharge under section 523(a)(8). McCoy v. United States, No. 20-886, pet’n denied, (June 21, 2021). The debtor/petitioner sought to reverse the Fifth Circuit’s application of the Brunner test under which that court found that the 62-year-old debtor, who had suffered a cascade of mental and physical catastrophes, failed to establish “total incapacity” to repay the debt in the future. In re McCoy, No. 19-40269 (5th Cir. June 5, 2020). The petition contrasted the Fifth Circuit’s Draconian test with the totality of circumstances test, under which the Eighth and the First Circuits consider whether the debtor’s “reasonable future financial resources will sufficiently cover payment of the student loan debt[] while still allowing for a minimal standard of living.” NACBA filed an amicus brief in support of the petitioner pointing out that a debtor’s chance of discharging a student loan was almost entirely dependent on what jurisdiction the debtor happened to live in. Unfortunately, the Supreme Court chose not to correct the anti-debtor stance the Fifth Circuit and other courts have adopted.
