2002 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

11-14-2002

In Re: Rajesh Mehta

Precedential or Non-Precedential: Precedential

Docket No. 01-2586

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Recommended Citation

"In Re: Rajesh Mehta " (2002). 2002 Decisions. Paper 729.

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PRECEDENTIAL 

 Filed November 13, 2002 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 01-2586 

IN RE: RAJESH MEHTA, 

 Debtor 

BOSTON UNIVERSITY, 

 Appellant 

v. 

RAJESH MEHTA 

Appeal from the United States District Court 

For the District of New Jersey 

(D.C. No. 00-cv-05448) 

District Judge: Hon. William H. Walls 

Argued: February 4, 2002 

Before: BECKER, McKEE and BARRY, Circuit Judges 

(Opinion filed: November 13, 2002) 

 Louis G. Rubino, Esq. (Argued) 

 White & Williams 

 222 Haddon Avenue 

 Suite 300 

 Westmont, N.J. 08108 

 Attorney for Appellant 

 Theodore Kozlowski, Esq. (Argued) 

 Suite 201 

 20 Park Place 

 Morristown, N.J. 07960 

 Attorney for Appellee 

 

OPINION OF THE COURT 

McKEE, Circuit Judge: 

In this case of first impression, we are asked to decide if 

a student’s outstanding tuition balance at the university he 

was attending can be discharged in bankruptcy. Rajesh 

Mehta initiated a bankruptcy proceeding in which he 

attempted to discharge tuition and fees he owed to Boston 

University. The university opposed discharge arguing that 

the outstanding balance of Mehta’s tuition and fees 

constituted either a "loan" or a debt for an"educational 

benefit" under 11 U.S.C. S 523(a)(8), and was therefore not 

dischargeable in bankruptcy. The district court entered 
partial summary judgment for Mehta and against the 

university, and this appeal followed.1 For the reasons that 

follow, we will affirm.2 

I. Background. 

Rajesh Mehta attended Boston University (hereinafter 

referred to as "BU") from the Fall 1992 semester through 

the end of the Fall 1993 semester. He received federally 

guaranteed student loans for the Fall 1992 and Spring 

1993 semesters. However, his loan application for the Fall 

1993 semester was denied, and he failed to secure any 

other financial assistance for that semester. Nevertheless, 

BU allowed Mehta to register and continue taking classes. 

Mehta completed the semester, and received academic 

credit for three classes. As a result, he incurred charges for 

delinquent tuition and related costs totaling $9,331.00. 

That amount subsequently increased to $12, 953.73 when 

interest and late fees were added. Mehta eventually filed a 

petition for voluntary bankruptcy under Chapter 7 without 

_________________________________________________________________ 

1. The bankruptcy court also ruled that the student’s delinquent 

federally guaranteed loans were not dischargeable in bankruptcy. That 

ruling has not been appealed, and is therefore not before us. 

2. Inasmuch as our inquiry is limited to the proper interpretation of a 

provision of the Bankruptcy Code, our review is plenary. In re Roth Am., 

Inc., 975 F.2d 949, 952 (3d Cir. 1992). 

 2 

 

satisfying his obligation to BU, and his petition listed BU as 

a general unsecured creditor in the amount of $15, 434.00.3 

He subsequently filed an adversary complaint with the 

bankruptcy court to determine the dischargeability of his 

obligation to BU. 

BU opposed discharge under 11 U.S.C. S 523(a)(8), and 

both parties eventually filed motions for summary 

judgment. The parties agreed that $2,000 of the 

outstanding balance was for a federally guaranteed 

educational loan that was not dischargeable. The court 

rejected BU’s argument that the remainder of Mehta’s debt 

was not dischargeable under 11 U.S.C. S 523(a)(8), and 

granted partial summary judgment in favor of Mehta in the 

amount of his delinquent tuition, late fees and interest. The 

district court affirmed. 

II. Discussion. 

11 U.S.C. S 523 provides in relevant part: 

 (a) a discharge under section 727, 1141, 1228(a), 

 1228(b) or 1328(b) of this title does not discharge an 

 individual debtor from any debt-- 

 *** 
 (8) for an educational benefit overpayment or loan 

 made, insured or guaranteed by a governmental unit, 

 or made under any program funded in whole or in part 

 by a governmental unit or nonprofit institution, or for 

 an obligation to repay funds received as an educational 

 benefit, scholarship or stipend, unless excepting such 

 debt from discharge under this paragraph will impose 

 an undue hardship on the debtor and the debtor’s 

 dependents 

11 U.S.C. S 523(a)(8) (1994). 

We look to the text of a statute to determine 

congressional intent, and look to legislative history only if 

the text is ambiguous. New Rock Asset Partners, L.P. v. 

_________________________________________________________________ 

3. A portion of that delinquency included the amount Mehta owed on 

nondischargeable government student loans. 

 3 

 

Preferred Entity Advancements, Inc., 101 F.3d 1492 (3d Cir. 

1996). Where statutory language is plain and 

unambiguous, " ‘the sole function of the court is to enforce 

it according to its terms.’ " Id. At 1498 (quoting United 

States v. Ron Pair Enters., Inc., 481 U.S. 235, 241 (1989)). 

Plain meaning is therefore conclusive, " ‘except in the ‘rare 

cases [in which] the literal application of a statute will 

produce a result demonstrably at odds with the intentions 

of its drafters.’ " Id. 

Congress did not define "loan" in S 523, and courts that 

have been called upon to interpret that provision have not 

agreed upon its meaning. BU urges us to broadly interpret 

the statute and thus declare that Mehta’s debt constitutes 

a loan or a debt for an educational benefit that is not 

dischargeable in bankruptcy. Mehta of course disagrees. He 

argues for a narrow interpretation consistent with the 

remedial purpose of bankruptcy. 

Courts have long recognized that bankruptcy is intended 

to "relieve the honest debtor from the weight of oppressive 

indebtedness and permit him to start afresh." In re 

Renshaw, 222 F.3d 82, 86 (2d Cir. 2000)(quoting Williams 

v. U.S. Fidelity & Guar. Co., 236 U.S. 549, 554-555 (1915)). 

However, bankruptcy is not only an ameliorative right of 

the debtor; it is also a remedy of the creditor. Matter of 

Marchiando, 13 F.3d 1111, 1115 (7th Cir. 1994). 

Accordingly, although bankruptcy is concerned with giving 

honest debtors a new beginning, "there are circumstances 

where giving a debtor a fresh start in life is not the 

paramount concern and protection of the creditor becomes 

more important." Renshaw, 222 F.3d at 86. Thus, the law 

does not allow debtors to escape all financial obligations by 

declaring bankruptcy. However, in large part because of 

bankruptcy’s underlying concern for affording a new 

beginning, statutory exceptions to discharge are generally 

construed "narrowly against the creditor and in favor of the 
debtor." In re Pelkowski, 990 F.2d 737, 744 (3d Cir. 1993). 

The creditor opposing discharge therefore has the burden of 

establishing that an obligation is not dischargeable. Grogan 

v. Garner, 498 U.S. 279 (1991). 

These conflicting policy considerations have created a 

certain tension that is reflected in the exclusions contained 

 4 

 

in S 523 and the legislative history of the Bankruptcy Code. 

That history has been detailed in In re Johnson , 218 B.R. 

449, 451-54 (B.A.P. 8th Cir. 1998), and outlined in 

Renshaw. Accordingly, we will only touch upon it here. 

A. Overview of 11 U.S.C. S 523(a)(8). 

When Congress established the Guaranteed Student 

Loan Program under the Higher Education Act of 1965, it 

sought to increase the availability of low interest, federally 

guaranteed loans in order to make higher education more 

affordable for a greater number of qualified students. S. 

Rep. No. 89-673, (1965), reprinted in 1965 U.S.C.C.A.N. 

4027, 4055. However, the Bankruptcy Reform Act of 1978, 

11 U.S.C. S 523(a)(8), placed restrictions on students’ ability 

to discharge these loans in bankruptcy because Congress 

was concerned about reported abuses of students who 

obtained the benefits of higher education while avoiding 

repaying student loans by declaring bankruptcy shortly 

after graduation. Subsequent amendments expanded the 

scope of the statute to its current form. 

Prior to the Reform Act of 1978, loans were fully 

dischargeable in bankruptcy. The law provided as follows: 

"Upon default by the student borrower on any loan covered 

by Federal loan insurance . . . the insurance beneficiary 

shall promptly notify the Commissioner, and the 

Commissioner shall . . . pay to the beneficiary the amount 

of the loss sustained by the insured . . .". Higher Education 

Act of 1965, Pub. L. No. 89-329, S 430(a), 79 Stat. 1219, 

1260 (1965) (amended 1976). Thus, the statute required 

the federal government to repay the educational institution 

if the student defaulted. A Congressional Commission 

subsequently recommended prohibiting discharge of 

educational obligations for the first five years after 

graduation unless the student faced undue hardship. See 

Report of the Commission on the Bankruptcy Laws of the 

United States, H.R. Doc. No. 93-137, at pts 1 & 11 (1973). 

In 1976, Congress passed S 439A of the Education 

Amendments of 1976, which added a limited 

nondischargeability provision. See Education Amendments 

of 1976, Pub. L. No. 94-482, S 439A(a), 90 Stat. 2081, 2141 

(codified at 20 U.S.C. S 1087-2) (1976) (repealed 1978). 

 5 

 

Section 439A was repealed in 1978, and 11 U.S.C. 

S 528(a)(8) -- the current provision -- took effect on October 
1, 1979.4 

B. Is Mehta’s Tuition Debt a "loan"? 

BU contends that Mehta’s tuition debt arose from an 

extension of credit for educational services, and that it is 

therefore tantamount to an educational "loan" that is 

excluded from discharge in bankruptcy under 11 U.S.C. 

S 523(a)(8). The university rests this argument in large part 

upon various provisions of its Student Accounting Services 

Department’s handbook. That booklet is referred to as "The 

Guide," and it is apparently given to all BU students upon 

registration or enrollment. BU notes that "The Guide states 

that ‘[b]y registering for any class in the University, each 

student accepts and agrees to be bound by’ certain 

University regulations and policies." (Brackets in original). 

Appellant’s Br. at 19. These regulations and policies include 

each student’s obligation to pay all applicable fees and 

charges, including tuition.5 Accordingly, BU argues: "when 

Mehta registered for class at BU a contract was formed 

whereby Mehta agreed to pay a defined quantity of money 

in exchange for a defined set of services, i.e. 

classes/tutition credits." Appellant’s Br. at 19. BU allowed 

Mehta to attend classes during the Fall 1993 semester 

without first paying tuition, and BU claims that the parties 

to the resulting "agreement" therefore clearly understood 

_________________________________________________________________ 

4. For an explanation of the "stop-gap" legislation that filled the gap 

between the repeal of S 439A and the effective date of S 523(a)(8), see 

Johnson, 218 B.R. at 453. 

5. More specifically, The Guide provided: 

 Boston University’s policy requires the withholding of all credit, 

 educational services, issuance of transcripts, and certification of 

 academic records from any person whose financial obligations to the 

 University (including delinquent student accounts, deferred 

 balances, and liability for damages) are due and/or unpaid. . . . By 

 registering for any class in the University, each student accepts and 

 agrees to be bound by the foregoing University policy as applied to 

 any preexisting or future obligation to the University. 

App. at A.39. 

 6 

 

that BU was extending a "loan" to Mehta in the amount of 

the Fall 1993 tutition, and that both BU and Mehta 

intended that result. However, the Court of Appeals for the 

Second Circuit rejected an analogous argument in 

Renshaw, and we find that court’s analysis persuasive. 

In Renshaw, the court consolidated the appeals of two 

students from different colleges who were each attempting 

to discharge delinquent tuition obligations in bankruptcy, 

222 F.3d at 84. In both cases, the respective colleges 

objected, arguing that S 523(a)(8) excluded delinquent 

tuition from discharge. Id. Renshaw had been allowed to 
register and attend classes without first paying tuition after 

he signed a "Reservation Agreement" that the college had 

executed before Renshaw signed. Id. at 85. 

 That agreement obligated [the college] to hold a place 

 open for Renshaw, provided he paid the amounts billed 

 when due, and not to charge him more for tuition than 

 the amount that was in effect on the applicable 

 registration date. The Agreement further required 

 Renshaw to pay a $285 reservation fee when he 

 returned it, to pay tuition, room, and board for the 

 1992 summer session and 1992-93 academic year, and 

 to be bound by various payment-related provisions set 

 out on the back of the Agreement and in the college 

 catalog. These provisions included an obligation to pay 

 a "service charge" with an effective annual rate of 19.2 

 percent if payments on the student’s account were not 

 made by their due dates. 

Id. The college claimed that the executed Registration 

Agreement constituted a loan under S 523 because it 

allowed Renshaw to register without prepaying based upon 

his promise to pay at a future date pursuant to the terms 

of the Reservation Agreement. Id. at 89. The court rejected 

that argument. Id. 

The court looked first to the common law definition of 

"loan" to interpret the meaning of S 523(a)(8). Id. at 88. 

Under common law, "[t]o constitute a loan there must be (i) 

a contract, whereby (ii) one party transfers a defined 

quantity of money, goods, or services, to another, and (iii) 

the other party agrees to pay for the sum or items 

 7 

 

transferred at a later date." 222 F.3d at 88; see also, In re 

Grand Union, 219 F. 353, 356 (2d Cir. 1914). The court 

reasoned that "[t]his definition implies that the contract to 

transfer items in return for payment later must be reached 

prior to or contemporaneous with the transfer. Where such 

is the intent of the parties, the transaction will be 

considered a loan regardless of its form." 222 F.3d at 88. 

However, the court concluded that the delinquent tuition 

obligations of the two students before it did not amount to 

loans because there was no "agreement" to extend credit, 

"or to permit the student to attend classes in return for a 

payment of tuition at a future date." Id. Instead, in both 

cases, the student simply "unilaterally decided not to pay 

tuition when it came due." Id. The court concluded that the 

colleges could well have prohibited the students from 

attending classes but they "chose not to do so." Id. The 

court also noted that both colleges had failed to reach any 

agreement "about future class attendance or an extension 

of credit." Id. 

Here, BU attempts to draw support from the analysis in 

Renshaw by emphasizing that the court there stressed that 

the exclusion contained in S 523(a)(8) applies if the parties 

intended a loan "regardless of its form." Id. at 88. We agree 
that form can not be elevated over substance, and that the 

intent of the parties must therefore dictate whether Mehta’s 

debt to BU is excluded from discharge under S 523(a)(8). 

However, this only undermine’s BU’s claim; it does not 

advance it. 

Mehta, like the students in Renshaw, simply"unilaterally 

decided not to pay tuition when it came due." 222 F.3d at 

88. This record simply does not allow us to conclude that 

BU intended to loan Mehta the amount of the tuition for 

the Fall 1993 semester when it allowed him to register and 

attend classes or that Mehta understood that to be BU’s 

intent. It does not appear that BU ever made any inquiry 

into Mehta’s creditworthiness or that it ever required him to 

execute any kind of promissory note or loan agreement. The 

document that allegedly constitutes Mehta’s loan agreement 

-- The Guide -- is nothing more than the type of 

generalized informational handbook that colleges and 

universities routinely supply to all students. It contains 

 8 

 

various fee schedules, and informs students of their 

financial obligations, optional payment plans, and refund 

procedures, as well as various remedies the university may 

exercise to collect delinquencies. It also explains how to 

replace meal and identification cards; and it provides 

information about medical insurance, as well as students’ 

entitlement to "admission to Boston University football, 

hockey, and basketball games." App. at A.41. 

The Guide is, therefore, far less suggestive of a"loan" 

than the Reservation Agreement in Renshaw. In Renshaw, 

the university and the student both executed the 

Reservation Agreement. That agreement contained language 

far more characteristic of a loan agreement than The Guide. 

For example, as noted above, it provided that interest would 

accrue at a specified rate. Yet, the various provisions of the 

Reservation Agreement were still insufficient to transform 

the understanding between the university and student into 

a loan under S 523. Rather, the Renshaw court concluded 

that "none of [those] casual covenants[met] the definition 

of loan." Renshaw, 222 F3d at 84. 

Although courts have reached different results when 

determining if forbearance in collecting tuition amounts to 

a loan, we agree with the distinction drawn in Renshaw 

between those cases holding that delinquent tuition is 

dischargeable under S 523(a)(8) and those holding it is not.6 

Renshaw instructs that courts have generally held that 

nonpayment of tuition can qualify as an educational loan 

under S 523(a)(8) "only in two classes of cases." See 

Renshaw, 222 F.3d at 90. Courts have reached that 

conclusion "where funds have changed hands," or where 

"there is an agreement . . . whereby the college extends 

credit . . . ."Id. The court included In re Joyner, 171 B.R. 

762, 763 (Bankr. E.D. Pa. 1994), as an example of the first 

class of cases, and In re Merchant, as an example of the 

_________________________________________________________________ 
6. Compare In re DePasquale, 225 B.R. 830 (Bankr. 1st Cir. 1998); In re 

Johnson, 218 B.R. 449 (Bankr. 8th Cir. 1998); In re Merchant, 958 F.2d 

738 (6th Cir. 1992); In re Hill, 44 B.R. 645 (Bankr. D. Mass. 1984); Najafi 

v. Cabrini College, 154 B.R. 185 (Bankr. E.D. Pa. 1993) (disallowing 

discharge) with In re Renshaw, 222 F.3d 82 (2nd Cir. 2000), and Seton 

Hall Univ. v. Van Ess, (In re Van Ess) 186 B.R. 375 (Bankr. D.N.J. 1994) 

(allowing discharge). 

 9 

 

latter class. As the Renshaw court noted, the university in 

In re Merchant required the student to sign a promissory 

note evidencing the student’s agreement with the 

university, and the university’s extension of credit. That 

was found probative of the parties’ intent even though 

neither a formal promissory note, nor written agreement, is 

a prerequisite to proving a "loan" so long as the 

circumstances allow the educational institution to satisfy 

its burden of proof.7 

Ironically, BU relies heavily upon In re DePasquale, 225 

B.R. 830 (B.A.P. 1st Cir. 1998), in arguing that allowing 

Mehta to attend classes without first paying the tuition he 

knew he owed constituted a loan. There, BU allowed 

DePasquale to attend classes without prepaying tuition only 

after engaging in protracted discussions with the student 

that lasted for two years. 225 B.R. at 831. BU finally 

relented and allowed DePasquale to register and attend 

classes without prepaying, but only after reaching an 

individualized agreement that BU would continue to bill her 

but allow her to register and pay tuition at some later time.8 

Furthermore, "[a]s a condition of receiving her degree," 

Depasquale executed a promissory note "promising to pay 

BU $22,607.05." Id. The court held that BU’s arrangement 

with DePasquale constituted a loan within the meaning of 

S 523(a)(8). Id. at 833. However, that is very different than 

the situation here. 

In fact, when we compare how BU handled DePasquale’s 

delinquency with how it handled Mehta’s, it is even more 

_________________________________________________________________ 

7. See generally, Renshaw, 222 F.3d at 90. See also In re Hill, 44 B.R. 

645 (Bankr. D. Mass.1984), wherein a student’s loan application in the 

amount of the semester’s tuition was pending, and the university 

extended a credit in the amount of the loan application without interest 

"to be paid as soon as he received the proceeds of his student loan." 44 

B.R. at 647. The bankruptcy court held that the credit in the amount of 

the loan was nondischargeable under S 523(a)(8). Id. 

8. The court noted, "In the fall of 1998, after more than two years of 

negotiations, BU permitted DePasquale to attend classes without 

prepaying her tuition. Although BU billed DePasquale for tuition, it was 

agreed that she would pay tuition later. They did not set a payment 

schedule." 225 B.R. at 831. The record is not clear as to the interest that 

was charged in DePasquale though it appears that interest did accrue. 

 10 
 

evident that BU can not establish that Mehta’s delinquency 

is excluded from discharge under S 523(a)(8). BU’s 

argument to the contrary would have us equate the 

generalized information in The Guide with the specific 

undertakings contained in the promissory note it demanded 

of DePasquale.9 As noted above, the court in Renshaw 

referred to the obligations specified in the Reservation 

Agreement (including the promise for a specific amount of 

interest accruing) as "casual covenants." 222 B.R. at 84. 

The terms of The Guide are even more "casual," and can 

hardly be considered "covenants." Although Mehta was no 

doubt aware of his obligations, as BU contends, awareness 

of an obligation does not establish that the parties intended 

a "loan." 

BU’s attempt to distinguish Seton Hall v. Van Ess (In re 

Van Ess), 186 B.R. 375 (Bankr. D.N.J. 1994), where the 

court did grant discharge is equally unpersuasive. The 

court there held that a student’s delinquent tuition was 

dischargeable because the exceptions to discharge 

contained in S 523(a) "should be narrowly construed against 

the creditor in order to carry out the rehabilitative policy of 

the Bankruptcy Code." Id. at 377-8. Inasmuch as the 

contrary construction urged by the university there would 

have been inconsistent with that liberal, rehabilitative 

policy, the court held that "a common sense reading of 11 

U.S.C. S 523(a)(8) reveals that the Debtor’s nonpayment of 

his tuition bill did not result in an extension of credit." Id. 

at 378. After examining the legislative history, the court 

concluded "[t]here is no overriding policy that warrants 

treating [the university] differently from any other creditor. 

Indeed, given the ready availability of student grants and 

loans, one might very well conclude that [the university] is 

particularly well situated to avoid defaults on tuition 

obligations." Id. at 379. The accuracy of that observation is 

demonstrated by BU’s actions in DePasquale. All BU had to 

do here was have Mehta sign the same kind of agreement 

it had DePasquale sign. 

BU suggests that Van Ess is distinguishable because the 

_________________________________________________________________ 

9. The record does not reflect whether BU issued The Guide to students 

when DePasquale registered there. 

 11 

 

court there expressed doubt about the number of classes 

the student actually attended during the semester in 

question, and because that student, unlike Mehta,"did not 

participate in any student loan programs." Appellant’s Br. 

at 14. However, those distinctions do not establish a 

difference. It is clear from the portion of the court’s opinion 

quoted above that the court in Van Ess simply concluded 

that delinquent tuition, without more, is not exempted from 

discharge under S 523(a)(8). Here, as in Van Ess, the record 

contains nothing that would allow us to find that the 
university and the student actually intended a loan. 

Accordingly, we will not now create a loan agreement where 

none otherwise exists. 

C. Mehta’s Delinquency is not a Debt for an 

Educational Benefit Under S 523(a)(8). 

BU relies in part upon Najafi v. Cabrini College, (In re 

Najafi), 154 B.R. 185 (Bankr. E.D. Pa. 1993) in making an 

alternative argument. BU claims that even if its"extension 

of credit" to Mehta was not a "loan," Mehta’s delinquency is 

still not dischargeable because it represents an 

"educational benefit" under S 523(a)(8). As noted above, in 

addition to excluding educational loans from discharge, 

S 523(a)(8) also excludes "any debt . . . for an educational 

benefit overpayment or loan made, insured or guaranteed 

by a governmental unit, or made under any program 

funded in whole or in part by a governmental unit or 

nonprofit institution, . . . ." 

However, we are not persuaded by the analysis in Najafi. 

The court there inserted commas into the relevant sections 

of S 523(a)(8) and interpreted the statute as it read after 

that change in punctuation. The court explained: 

 We believe that the absence of commas in the phrase 

 "educational benefit overpayment or loan made" makes 

 this phrase difficult to interpret. However, as 

 Pelkowski, supra, teaches, 990 F.2d at 742-44, there is 

 no support for the Debtor’s contention, similar to that 

 asserted by the Pelkowski debtor, that S 523(a)(8) must 

 be read narrowly. We believe that, when reading the 

 Code section more broadly than the Debtor suggests, 

 12 

 

 the terms "benefit," "overpayment," and"loan" should 

 be construed as a series of nouns, all modified by the 

 adjective "educational." Therefore, we conclude that his 

 debt, assuming arguendo that it could not be classified 

 as an "educational loan," falls within the scope of 

 S 523(a)(8). 

154 B.R. at 190. 

However, the statute that resulted from the court’s 

editing is not the statute that Congress drafted. The court 

in Renshaw properly rejected the analysis in Najafi, and so 

do we. Renshaw concluded that the exemption in 

S 523(a)(8) only applies where there has actually been an 

overpayment for an educational benefit program such as 

the GI bill. 222 B.R. at 92. This is because Congress 

concluded, as a policy matter, that the fiscal integrity of 

such educational programs takes priority over giving the 

individual debtor a fresh start. It therefore excluded such 

programs from the discharge that is otherwise available in 

bankruptcy. Accordingly, if a program such as a federally 

funded loan program makes an overpayment to a student, 

the student can not escape repayment by filing for 
bankruptcy. See Renshaw, 222 B.R. at 92. That is not the 

situation here. 

We also reject any attempt to suggest that Mehta’s 

obligation falls within S 523(a)(8)’s exclusion of obligations 

for "funds received as an educational benefit. . . ." No funds 

have been advanced by BU or received by Mehta for the 

semester in question. 

D. Equitable Considerations. 

Finally, BU makes an equitable argument in support of 

its opposition to discharging Mehta’s outstanding tuition. 

The university reminds us that it has litigated the same 

issue of dischargeability in a different jurisdiction and 

prevailed. See Appellant’s Br. at 22 (citing DePasquale). 

Accordingly, argues BU, lack of uniformity in various 

jurisdictions will leave it vulnerable to the "luck of the 

draw" and promote forum shopping by students seeking to 

discharge educational debts. 

 13 

 

However, we have already explained that Mehta’s 

situation differs from DePasquale’s and that the holding in 

DePasquale undermines BU’s claim here to the extent that 

DePasquale does apply. Furthermore, we fail to see how 

this logistical problem of BU’s own making translates into 

the kind of equitable consideration that is cognizable in 

bankruptcy. As noted above, BU does not have to do 

anything more than it did in DePasquale to protect itself 

from the parade of horribles it now marches in front of us. 

Absent some similar evidence of a "loan,"S 523(a)(8) does 

not apply. Therefore, neither equity nor our construction of 

the statute allows us to reach the result BU urges upon us. 

See Peller v. Syracuse Univ. (In re Peller), 184 B.R. 663 

(Bankr. D.N.J. 1994). 

III. Conclusion. 

Accordingly, for the reasons set forth herein, we will 

affirm the judgement of the district court. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 14