Is a licensing study loan (Barbri, PNC Solution, MedCAP-XTRA, etc) a nondischargeable student loan?


It is a good general rule of thumb that student loans are NONdischargeable in bankruptcy.  It doesn’t matter if they are private loans or not.  They will most likely survive bankruptcy.

However, today I had a client ask me if his bar prep loan could be discharged.  When you graduate from law school, you have to pass a licensing exam called “the bar.”  Some people take out loans during this study period to cover expenses, like loans through Barbri, PNC Solution, or even post-med school loans like MedCAP-XTRA.  I had never thought it through and assumed that those were “student loans.”  Then, I did some research.

They MAY be dischargeable in bankruptcy.  study loan

I found the following article:  “Bar Study” loan determined to be dischargeable. by Erick Boeing (from his bankruptcy website/blog).  He won an adversary proceeding by default against a study loan with the following argument:

The Debtor initiated the adversary proceeding, claiming that the loan was not a “student loan” as defined by law. It was not intended to cover the costs of attending a Title IV institution; Indeed, there was no “institution” at all; she was engaged in self-study and had tutoring from private “bar prep” companies. Moreover, she was pursuing a professional license, not an academic degree.

And he won.  Of course, it was by default, but this gives an interesting framework to argue that a licensing study loan may be dischargeable.