ECMC v. Acosta-Conniff

Filing 21

MEMORANDUM OPINION AND ORDER that the bankruptcy courts March 25, 2015 judgment is REVERSED and that this action is REMANDED to the bankruptcy court for an entry of judgment in favor of Appellant ECMC as further set out in the opinion and order. A final judgment will be entered separately. Signed by Chief Judge William Keith Watkins on 5/2/2016. Copy furnished electronically to Bankruptcy Clerk.(dmn, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION
ECMC,
Appellant,
v.
ALEXANDRA ELIZABETH
ACOSTA-CONNIFF,
Appellee.

)
)
)
)
)
)
)
)
)
)

CASE NO. 2:15-CV-220-WKW
[WO]

MEMORANDUM OPINION AND ORDER
The bankruptcy court determined that repayment of Appellee Alexandra
Elizabeth Acosta-Conniff’s (“Conniff”) student loan debt would result in undue
hardship under 11 U.S.C. § 523(a)(8), and it discharged the $112,00 debt. Appellant
ECMC appeals the bankruptcy court’s decision. It asserts that the bankruptcy court
erred in finding that Conniff satisfied the Eleventh Circuit’s three-part test governing
the determination of undue hardship. See Hemar Ins. Corp. of Am. v. Cox (In re
Cox), 338 F.3d 1238, 1243 (11th Cir. 2003) (per curiam) (holding that the three-part
test established in Brunner v. New York State Higher Education Services Corp., 831
F.2d 395, 396 (2d Cir. 1987) (per curiam), “is the appropriate test for determining
‘undue hardship’”). Ultimately this appeal resolves on a single element of that test:
Conniff has failed to prove that “‘additional circumstances exist indicating that [her]
state of affairs is likely to persist for a significant portion of the repayment period of

the student loans,’” as required under Brunner’s second element. Id. at 1241
(quoting Brunner, 831 F.2d at 396). Accordingly, the decision of the bankruptcy
court is due to be reversed with instructions for the bankruptcy court to enter
judgment in favor of ECMC.
I. JURISDICTION AND VENUE
This court has jurisdiction to review the Order of the bankruptcy court under
28 U.S.C. § 158(a)(1), which provides district courts with jurisdiction over appeals
“from final judgments, orders, and decrees . . . of bankruptcy judges entered in cases
and proceedings referred to the bankruptcy judges under section 157 of this title.”
Venue is proper because an appeal “shall be taken only to the district court for the
judicial district in which the bankruptcy judge is serving.” Id. § 158(a).
II. BACKGROUND
A.

Procedural History
Conniff filed a Chapter 7 bankruptcy petition on June 13, 2012. (Doc. # 1-3,

at 1.) On January 31, 2013, the court granted a discharge in her bankruptcy case
pursuant to 11 U.S.C. § 727. She filed an adversary proceeding on March 21, 2013,
seeking the discharge of her student loan debt owed to ECMC, a specialized student
loan guarantor under the Federal Family Education Loan Program. (Doc. # 1-3, at 1–
2.) The bankruptcy court held a bench trial on January 26, 2015, and issued a written
opinion on April 8, 2015. It determined that excepting Conniff’s student loan debt
2

from discharge would cause her undue hardship; therefore, the bankruptcy court
discharged her debt pursuant to 11 U.S.C. § 523(a)(8). (Doc. # 1-3, at 1, 14.)
B.

The Bankruptcy Court’s Decision1
The following facts include those found by the bankruptcy court expressly in

its oral and written pronouncements and implicitly through its adoption of Ms.
Conniff’s trial testimony. (See Doc. # 2-11, at 77 (The bankruptcy court’s oral
pronouncement at trial that Conniff has been “forthright and credible” and that it
“accepts her testimony”); Doc. # 1-3, at 4 (The bankruptcy court’s written decision
that “Conniff’s testimony was forthright and credible”).) ECMC, for the most part,
has not challenged the bankruptcy court’s findings of facts, but instead argues that
the findings of fact do not support the bankruptcy court’s conclusions of law.
At the time of trial, Conniff was a forty-four-year-old single mother of two
healthy sons, who were fourteen and sixteen years old. (Doc. 1-3, at 2; Doc. # 2-11,
at 13, 33.) The bankruptcy court found that Conniff owes ECMC approximately
$112,000 as a result of educational loans. (Doc. # 1-3, at 2.) These loans have
enabled Conniff to earn four degrees from Auburn University: (1) a bachelor of
science in chemistry in 1993; (2) a master’s degree in learning disabilities in 1997;

1

The appeal record has been supplemented with ECMC’s trial exhibits. (See Docs. # 19–

20.)
3

(3) a master’s degree in educational leadership in 2007; and (4) a Ph.D. in special
education in 2007. (Doc. # 2-11, at 12, 40–41.)
Conniff has been a teacher since 1997. Presently, she is a full-time public
school teacher in Eufaula, Alabama. Having worked for the Eufaula City Board of
Education since 2003, Ms. Conniff has earned tenure. For the majority of her career,
Ms. Conniff has been a special education teacher; however, her health problems,
which she describes as adult-onset Type II diabetes and morbid obesity, recently
prompted her to seek a lateral transfer from a special education teacher to a secondary
science teacher, where the work is less physical. (Doc. # 2-11, at 9, 12–13, 19.)
Conniff’s educational degrees place her at “the top of the pay scale” for her
position within her school district. (Doc. # 2-11, at 19.) Conniff is unsatisfied with
her job to the extent that she says it “does not pay that well” even with the advanced
educational degrees. (Doc. # 2-11, at 19.) She does not expect to receive significant
pay increases in the future; however, she earns annual salary increases when
approved by the State of Alabama and also is eligible for step increases in pay every
three years. (Doc. # 2-11, at 26, 34–35.)
Conniff reported her monthly income and expenses on Schedules I and J, and
the bankruptcy court relied principally upon those schedules, as supplemented by the
trial evidence, to determine Conniff’s disposable income. Conniff earns a monthly

4

net salary of approximately $2,9502 and receives approximately $500 a month in
child support. Additionally, on a monthly basis, she incurs around $3,487 in
expenses. Conniff’s Schedules I and J reveal a monthly shortfall of $33.3 (Doc. # 13, at 11 n.5.) The bankruptcy court determined that Conniff’s monthly payment on
her $112,000 debt to ECMC would be $915 for fifteen years.4 (Doc. # 1-3, at 2.)
After earning her Ph.D. in 2007, Conniff has applied in her school district for
higher-paying positions, most recently in 2012, but so far without success. These
positions include assistant principal, principal, special education coordinator, federal
programs coordinator, and superintendent. (Doc. # 2-11, at 18–19, 40.) Conniff has
not applied for jobs outside of her school system. She maintains that she could lose
her seniority and tenure if she obtained employment in another school district.
Conniff also has support from family and friends in Eufaula and, for that additional
reason, does not feel it is in her best financial interest to leave the area. (Doc. # 211, at 18–19; Doc. # 1-3, at 3.)

2

The bankruptcy court rounded down Conniff’s monthly take-home pay from $2,954 to
$2,950. By the time of trial, Conniff had received a bump in her salary based upon across-theboard annual raises, and her monthly gross earnings were $4,950 per month, or $59,400 per year.
(Doc. # 2-11, at 26.)
3

The bankruptcy court’s opinion contains a typographical error in note 5. In her Schedule
I, Conniff reported her monthly income as $3,454, not $3,487.
4

The bankruptcy court calculated the monthly payment based on a fifteen-year term at an
interest rate of 5.5%. The parties accept that calculation on appeal, and, thus, the court does the
same.
5

Conniff has been able to earn additional income through extra jobs, including
providing language translations for the board of education and working as an adjunct
professor in Montgomery, Alabama.

She testified, however, that she incurs

additional costs for “gas, childcare, and eating out” and that these additional costs
are often more than the additional income earned. (Doc. # 2-11, at 16.)
Conniff has paid more than $9,000 toward her loans, but the loans have been
in a deferral status for several years. (Doc. # 1-3, at 3–4.) There is no evidence that
she has applied for the Income-Contingent Repayment Plan (“ICRP”), 34 C.F.R.
§ 685.209, which lowers a debtor’s payment in response to hardship based upon a
specified formula.
After setting forth its factual findings, the bankruptcy court turned to the
governing law. It recognized that the Eleventh Circuit has adopted the Second
Circuit’s three-part test in Brunner for determinations of undue hardship under
§ 523(a)(8). (Doc. # 1-3, at 8–9.) Under the Brunner test, in order to show undue
hardship, a debtor must establish:
“(1) that [he or she] cannot maintain, based on current income and
expenses, a “minimal” standard of living for herself and her dependents
if forced to repay the loans; (2) that additional circumstances exist
indicating that this state of affairs is likely to persist for a significant
portion of the repayment period of the student loans; and (3) that the
debtor has made good faith efforts to repay the loans.”

6

In re Cox, 338 F.3d at 1241 (quoting Brunner, 831 F.2d at 396). Applying Brunner’s
three elements to its findings of fact, the bankruptcy court determined that repayment
of the student loan debt would cause Conniff “undue hardship” under § 523(a)(8).
First, it concluded that “the information contained on Schedules I and J and
the evidence offered at trial” demonstrate that “it is readily apparent that Conniff
could not make that [$915] payment and support herself and her children with a
minimal standard of living.” (Doc. # 1-3, at 2–3.) The bankruptcy court did not
indicate whether it had determined that all of the Schedule J expenses were
reasonable and necessary for the support of Conniff and her two dependent sons.
The record is mostly silent as to this fact-bound undertaking. The bankruptcy court
did observe, however, that Conniff “could eliminate the voluntary pension
contribution” of $220 per month and “perhaps squeeze a couple of hundred more out
of her budget.” (Doc. # 1-3, at 11.) It also noted that “one may quibble about
expenses such as cable television” (Doc. # 1-2, at 12), but it did not make a finding
whether this expense, which is listed on Conniff’s Schedule J, was reasonable or not.
The bankruptcy court also acknowledged ECMC’s trial testimony that Conniff
is eligible for the ICRP, and that, under the ICRP, her monthly payment would be
$346 for 120 months, at which point the remainder of the loans would be forgiven.
(Doc. # 1-3, at 12.) However, the bankruptcy court used $915 as the benchmark for
assessing whether Conniff met Brunner’s first element (Doc. # 1-3, at 2) and
7

concluded that “[t]he availability of an [ICRP] does not preclude the possibility of a
discharge where, as here, the undue hardship requirement is met” (Doc. # 1-3, at 12).
See also Doc. # 1-3, at 11 (opining that, even if “Conniff could eliminate the
voluntary pension contribution and perhaps squeeze a couple of hundred more out
of her budget,” she still would be “considerably short of meeting a required payment
of $915 per month”).)5
Second, at trial, the bankruptcy court orally pronounced that Conniff had
satisfied the second Brunner element because the “State of Alabama does not pay its
teachers very well” and does not “pay much premium for the additional degrees.”
(Doc. # 2-11, at 78.) It noted that any significant raise in teachers’ pay in Alabama
was unlikely for the near future. In its written opinion, the bankruptcy court observed
that, “[b]ased upon Conniff’s testimony and the Court’s general knowledge of
teachers’ level of pay (derived from thousands of bankruptcy cases per year filed in
this Court by debtors—some of which are filed by teachers), . . . Conniff’s pay is not
likely to significantly increase in the near future.” (Doc. # 1-3, at 3.) It concluded
that, based upon “the evidence offered at trial,” including Conniff’s testimony, “there

5

Conniff also testified that she applied three times with a different loan forgiveness
program that would have absolved $17,500 of her debt for each five-year consecutive period that
she taught special education in a rural area. She said, however, that her application was denied
each time because she had consolidated an eligible loan with an ineligible loan. (Doc. # 2-11,
at 42.) She did not provide any evidence of these applications or denials. (Doc. # 2-11, at 45.)
Whether she would have been eligible if she had modified her application is unanswered on the
bankruptcy court’s record.
8

was nothing in [Conniff’s] circumstances which [was] likely to change in the future”
(Doc. # 1-3, at 11), and that “much of the [future] savings from the emancipation of
her children” would likely be offset by the cessation of child support payments (Doc.
# 1-3, at 13).
Third, the bankruptcy court found that Conniff acted in good faith to repay her
student loan debt. It concluded that Conniff demonstrated good faith based upon the
“actual payments” she made “over a period of years” and her efforts in applying for
partial loan forgiveness under the program for teachers who taught in a rural area for
five consecutive years, see supra note 5. (Doc. # 1-3, at 13.)
Based upon its conclusion that Conniff had demonstrated each of the three
Brunner elements, the bankruptcy court discharged Conniff’s debt. ECMC appeals.
III. STANDARD OF REVIEW
The determination of whether the repayment of student loans imposes an
“undue hardship” is a mixed question of fact and law. Educ. Credit Mgmt. Corp. v.
Mosley (In re Mosley), 494 F.3d 1320, 1324 (11th Cir. 2007). The bankruptcy
court’s legal conclusions are reviewed de novo.

Id.

The district court must

“independently examine the law and draw its own conclusions after applying the law
to the facts” and then “may affirm, modify, or reverse a bankruptcy judge’s
judgment, order, or decree or remand with instructions for further proceedings.” Ky.
Higher Educ. Assistance Auth. v. Norris (In re Norris), 239 B.R. 247, 249 (M.D.
9

Ala. 1999) (quoting Prestwood v. United States (In re Prestwood), 185 B.R. 358,
360 (M.D. Ala. 1995), and Fed. R. Bank. P. 8013 (internal quotation marks omitted)).
The factual findings of the bankruptcy court are reviewed for clear error. In re
Mosley, 494 F.3d at 1324. A finding of fact “is clearly erroneous when, although
there is evidence to support it, the reviewing court on the entire evidence is left with
the definite and firm conviction that a mistake has been committed.” Anderson v.
City of Bessemer City, N.C., 470 U.S. 564, 573 (1985) (citation, internal quotation
marks, and alterations omitted). When considering a bankruptcy appeal, the district
court is not “authorized to make independent factual findings; that is the function of
the bankruptcy court.” Equitable Life Assurance Soc’y v. Sublett (In re Sublett), 895
F.2d 1381, 1384 (11th Cir. 1990). “If the bankruptcy court’s factual findings are
silent or ambiguous as to an outcome determinative factual question, the district
court must remand the case to the bankruptcy court for the necessary factual
determination.” Id. (citation, internal quotation marks, and alterations omitted).
IV. DISCUSSION
A.

Introduction
Pursuant to § 523(a)(8), student loans presumptively are nondischargeable in

bankruptcy. In re Mosley, 494 F.3d at 1324. There is a narrow exception when
failing to discharge the student loans in bankruptcy would “impose an undue
hardship on the debtor and the debtor’s dependents.” § 523(a)(8); (see also Doc.
10

# 1-3, at 6 (explaining that “[t]his undue hardship provision is actually an exception
to an exception”).) Congress enacted § 523(a)(8) amid reports that students were
abusing the fresh start policy of the bankruptcy code by filing for bankruptcy and
then seeking discharge of their student loans after graduation. Educ. Credit Mgmt.
Corp. v. McLeroy (In re McLeroy), 250 B.R. 873, 878 (N.D. Tex. 2000). Congress
added subsection 8 “in order to protect the United States Treasury, as well as to
protect the solvency of the guaranteed student loan program.” Id.; see also In re
Pelkowski, 990 F.2d 737, 743 (3d Cir. 1993) (“[T]he debate in the main focused on
the twin goals of rescuing the student loan program from fiscal doom and preventing
abuse of the bankruptcy process by undeserving debtors.”).
Amendments to § 523(a)(8) over the years increasingly have limited debtors’
abilities to discharge student loans and have clarified “that Congress intended to
make it difficult for debtors to obtain a discharge of their student loan indebtedness.”
In re Cox, 338 F.3d at 1243; see also Brunner, 831 F.2d at 396 (noting “clear
congressional intent . . . to make the discharge of student loans more difficult than
that of other nonexcepted debt”).
While § 523(a)(8) does not define “undue hardship,” the Eleventh Circuit has
adopted the three-part Brunner test as the standard for such a determination.6 In re
Cox, 338 F.3d at 1241. The debtor has the burden to show all three parts by a

6

The Brunner elements are set out supra in Part II.B.
11

preponderance of the evidence. See In re Mosley, 494 F.3d at 1324; see also
Brightful v. Penn. Higher. Educ. Assistance Agency (In re Brightful), 267 F.3d 324,
327–28 (3d Cir. 2001) (“If one of the elements of the [Brunner] test is not proven, . . .
the student loans cannot be discharged.”).
Adopting the Brunner test, the Eleventh Circuit determined that the test “is an
effective tool in analyzing” undue hardship, which it defined as “not the mere
inability to pay, but an inability to pay that is likely to continue for a significant
time.” In re Cox, 338 F.3d at 1242. It disagreed with the contention that the test
produces “harsh and sometimes absurd results,” noting that
[t]he government is not twisting the arms of potential students. The
decision of whether to borrow for a college education lies with the
individual; absent an expression to the contrary, the government does
not guarantee the student’s future financial success. If the leveraged
investment of an education does not generate the return the borrower
anticipated, the student, not the taxpayers, must accept the
consequences of the decision to borrow.
Id. (quoting In re Roberson, 999 F.2d 1132, 1137 (7th Cir. 1993)).
The Third Circuit has opined that the Brunner test is to be “strictly construed:
equitable concerns or other extraneous factors not contemplated by the test may not
be imported” into the undue hardship analysis. In re Brightful, 267 F.3d at 328. And
the Eleventh Circuit has echoed that “there is no evidence of an intent to permit
judicially created exceptions to § 523(a)(8) via the ‘fresh start’ principle.” In re Cox,
338 F.3d at 1243.
12

ECMC disputes the finding of undue hardship.

ECMC asserts that the

bankruptcy court erred in finding that Conniff had met each of the three elements of
the Brunner test and consequently erred in its ultimate conclusion of undue hardship.
(Doc. # 11, at 2.) For the reasons that follow, Conniff fails to sustain her burden
under the second element of the Brunner test and is not entitled to a discharge of her
student-loan debt.

It is unnecessary, therefore, to address the first and third

elements.7 Before discussing Brunner’s second prong, the court will comment on
ECMC’s general argument that the bankruptcy court misapplied the Brunner
standard by giving undue weight to the discharge policies that preceded the 1998
amendments to § 523(a)(8).
B.

History of Student Loan Dischargeability
The bankruptcy court relayed the history of the dischargeability of student

loans beginning with the first exception to the discharge of such debts in 1977. (Doc.
# 1-3, at 6–7.) It highlighted that Brunner and other similar landmark cases preceded
the 1998 amendments by which Congress eliminated time-based restrictions for

7

Because this appeal resolves on the Brunner’s second element, it is unnecessary to
determine (1) whether under Brunner’s first element a remand would be required for further factual
findings on the reasonableness and necessity of Conniff’s expenses and for consideration of
Conniff’s eligibility for the ICRP, see Wieckiewicz v. Educ. Credit Mgmt. Corp., 443 F. App’x
449, 451 (11th Cir. 2011) (“Wieckiewicz’s eligibility under the [ICRP] would play a substantial
role in whether he would be able to show undue hardship under Brunner.”) or (2) whether under
Brunner’s third element, Conniff has met her burden of proof to demonstrate good-faith efforts to
repay the loans.
13

dischargeability and opined that “[a] denial of discharge of a student loan then was
not a life sentence of nondischargeability, as it is now.” (Doc. # 1-3, at 8.) It
concluded its historical analysis by determining that
what one may consider to be an undue hardship where a debtor is
required to pay a debt of a few thousand dollars, which may ultimately
be discharged in five or seven years, may be quite different than what
one may consider to be an undue hardship of a debt in the amount of
$100,000 or more, which will not discharge for the life of the debtor.
(Doc. # 1-3, at 8; see also Doc. # 2-11, at 77 (observing that the elimination of the
statutory time-based restrictions for dischargeability is a “significant factor . . . to be
considered”).)
The bankruptcy court identified the Brunner test as the governing standard in
the Eleventh Circuit. (Doc. # 1-3, at 9.) It is not entirely clear, though, whether the
bankruptcy court’s ultimate conclusion of undue hardship credited Congress’s 1998
tightening of the reigns on the dischargeability of student-loan debts or whether the
conclusion sought to provide an equitable escape from a perceived “life sentence” of
debt. (Doc. # 1-3, at 8.) As noted in In re Cox, the Eleventh Circuit rejected the
argument that Brunner’s test rendered unduly severe results in light of the subsequent
1998 amendments to § 523(a)(8). It recognized that “Congress’s intent to make it
harder for a student to shift his debt responsibility onto the taxpayer is clear from the
1998 amendments.” 338 F.3d at 1242.

14

Review of the bankruptcy court’s analysis of Brunner’s second element will
be conducted without taking into account equitable considerations.
C.

Additional Circumstances
The second element of the Brunner test requires that additional circumstances

exist such that the debtor’s present inability to repay the student loan and maintain a
minimal standard of living “‘is likely to persist for a significant portion of the
repayment period of the student loans.’” In re Cox, 338 F.3d at 1241 (quoting
Brunner, 831 F.2d at 396). “Requiring evidence not only of current inability to pay
but also of additional, exceptional circumstances, strongly suggestive of continuing
inability to repay over an extended period of time, more reliably guarantees that the
hardship presented is ‘undue.’” Brunner, 831 F.2d at 396. Hence, the second factor
“clearly reflects the congressional imperative that the debtor’s hardship must be
more than the normal hardship that accompanies any bankruptcy.” Educ. Credit
Mgmt. Corp. v. Frushour (In re Frushour), 433 F.3d 393, 401 (4th Cir. 2005).
As one bankruptcy court in this circuit has commented, “The Eleventh Circuit
has not provided clear guidance on applying [Brunner’s] prong two other than to
embrace the ‘certainty of hopelessness’ standard.” Williams v. Am. Educ. Serv. (In
re Williams), 492 B.R. 79, 87 (Bankr. M.D. Ga. 2013) (quoting In re Mosley, 494
F.3d at 1326). In Mosley, the Eleventh Circuit cited approvingly the Third Circuit’s
portrayal of the second Brunner element as requiring the debtor to show that “there
15

is a ‘certainty of hopelessness’ that [he or she] will be able to repay the loans within
the repayment period.” In re Mosley, 494 F.3d at 1326 (quoting In re Brightful, 267
F.3d at 328). Other circuits also have addressed Brunner’s second prong.
In Brightful, the Third Circuit opined that the debtor “must prove ‘a total
incapacity . . . in the future to pay [her] debts for reasons not within [her] control,’”
and it emphasized that the second Brunner element is “a demanding requirement.”
267 F.3d at 328 (quoting Penn. Higher Educ. Assistance Agency v. Faish (In re
Faish), 72 F.3d 298, 307 (3d Cir. 1995)). Additionally, the Ninth Circuit, while not
foreclosing the possibility that there could be circumstances within the debtor’s
control that qualify as additional circumstances, explained that “the debtor cannot
purposely choose to live a lifestyle that prevents her from repaying her student loans.
Thus, the debtor cannot have a reasonable opportunity to improve her financial
situation, yet choose not to do so.” Educ. Credit Mgmt. Corp. v. Nys (In re Nys), 446
F.3d 938, 946 (9th Cir. 2006). But “[a]t the same time,” the debtor is not at fault
“for having made reasonable choices that now inhibit her ability to substantially
increase her income in the future.”8 Id.

8

Some courts also have interpreted Brunner’s second element to include only a
circumstance that affects the debtor’s future earning potential that “was either not present when
the debtor applied for the loans or has since been exacerbated.” Douglas v. Educ. Credit Mgmt.
Corp., (In re Douglas), 366 B.R. 241, 257 (Bankr. M.D. Ga. 2007) (citation, internal quotation
marks, and emphasis omitted). ECMC advocates this position; however, on this record, it is
unnecessary for purposes of this appeal to determine whether the additional circumstances must
post-date the student loans to qualify under Brunner.
16

Against the foregoing backdrop of legal principles, ECMC argues that Conniff
has not presented additional circumstances that render it virtually hopeless that she
will be able to repay her loans within the repayment period. (Doc. # 11, at 29–32.)
The court agrees that Conniff has not satisfied her burden under Brunner’s second
element.
The bankruptcy court’s written decision does not identify specifically any
“additional circumstances” but concludes generally that, “[b]ased upon Conniff’s
testimony, there is nothing in her circumstances which is likely to change in the
future.” (Doc. # 1-3, at 13.) At trial, however, the bankruptcy court highlighted that,
in Conniff’s present job as an Alabama public-school teacher, her salary is not likely
to increase during a significant portion of the repayment period. (See, e.g., Doc. # 211, at 78, in which the bankruptcy court observed that the “State of Alabama does
not pay its teachers very well” and does not “pay much premium for the additional
degrees” and took notice that “at least in the near future it’s unlikely that teachers’
pay is going to increase in the State of Alabama very much”). Conniff, echoing the
bankruptcy court, contends that her salary cap in the Eufaula public-school system
is pivotal in the analysis of Brunner’s second element. More specifically, Conniff
argues that she has shown additional circumstances because she has reached the peak
of her pay in her present position, she is unlikely to find a higher-paying job in the

17

same geographical area, and her tenured status and family support make it financially
impracticable for her to look for work outside her school district.
Even assuming as true a general premise that, in the State of Alabama, a
public-school teacher with advanced degrees is undercompensated and lacks
significant potential for pay increases, that premise is insufficient to sustain
Conniff’s burden of proving the additional circumstances prong of the Brunner
“undue hardship” test for several reasons. Conniff’s student loans have financed her
advanced degrees, which undisputedly have enabled her to earn more income than
she could have earned without the degrees. Although she is not satisfied with the
pay the advanced degrees ultimately have yielded, Conniff chose to earn four
degrees, funded primarily by student loans, in her preferred career path of education
with a general understanding of the benefits she would obtain from the degrees
versus the costs. She admits specifically that she decided to obtain another student
loan to earn her pinnacle Ph.D. in special education and agreed to repay it, knowing
how the cost of the Ph.D. compared with the increase in pay it would provide. (Doc.
# 2-11, at 31.) Conniff finds herself in circumstances largely of her own informed
decision-making, which although not dispositive, is a consideration. See In re
Brightful, 267 F.3d at 328.
Other courts in persuasive opinions similarly have rejected arguments that
additional circumstances exist when the debtor contends that he or she is trapped in
18

a career choice that lacks significant future earning potential. In Matthews-Hamad
v. Educational Credit Management Corp. (In re Matthews-Hamad), 377 B.R. 415
(Bankr. M.D. Fla. 2007), for instance, the bankruptcy court found that the debtor had
not shown additional circumstances, even though her $30,445 salary was “at the top
of her profession” and she was unlikely to find a higher-paying job in her field that
offered the flexible schedule she needed to care for her disabled daughter. Id. at 422.
It found that “the fact that a debtor has a low-paying job without much upside earning
potential is not enough to satisfy th[e second] prong of the Brunner test.” Id. (citing,
among other cases, Frushour, 433 F.3d at 401, for Frushour’s conclusion that,
“‘[h]aving a low-paying job . . . does not in itself provide undue hardship’ where
debtor was voluntarily employed in her preferred field as decorative painter”); see
also U.S. Dep’t of Educ. v. Gerhardt (In re Gerhardt), 348 F.3d 89, 93 (5th Cir.
2003) (stating that “nothing in the Bankruptcy Code suggests that a debtor may
choose to work only in the field in which he was trained, obtain a low-paying job,
and then claim it would be an undue hardship to repay his student loans”).
Additionally, although the concerns Conniff raises about losing tenure and
family support if she leaves the geographical area for a higher-paying job are
understandable, her decision to stay in the area also is one she made of her own
volition after measured deliberations. Again, as she testified, she incurred additional
student loan debt to acquire a Ph.D., knowing the approximate salary increase she
19

would obtain with the advanced degree if she chose to remain in the same school
district and knowing the indirect financial savings she would receive by leaning on
friends and family in the area to assist with childcare and other expenses. Relatedly,
to the extent that her decision to remain in the same school district is tied principally
to the financial savings her family provides for the care of her dependent sons,
Conniff has not shown that childcare expenses will persist for a significant portion
of the fifteen-year repayment period, given that at the time of the adversary
proceeding her sons were ages fourteen and sixteen.9
The bankruptcy court found, though, that “much of the [future] savings from
the emancipation of [Conniff’s] children” will be offset by the cessation of child
support payments (Doc. # 1-3, at 13). This finding is clearly erroneous. Conniff
provided limited evidence of how much she spends on her children per month. There
is testimony, but little more than this, that Conniff pays $300 a month for lunches
for her children and herself, $222 for family health insurance, a Verizon payment
ranging from $134 to $278 that covers cell phone service and a data plan for three
iPhones, and around $100 quarterly for life insurance policies on her sons. This
evidence does not permit an informed weighing of Conniff’s future childcare savings
against the $500 monthly child support payment she receives. Conniff’s failure to

9

It is notable also that Conniff has presented no reason that would preclude her healthy
teenaged sons from helping relieve some of the financial strain, for example, by taking over the
lawn chores.
20

provide an adequate evidentiary record on this point required the bankruptcy court
to have to speculate as to the amount of child-related costs she incurs and thus will
eventually save. She has failed to present evidence to support a finding that, in the
calculus of predicting future income, the termination of child support is “likely [to]
offset[ ] much of the savings from the emancipation of her children.” (Doc. # 1-3,
at 13); cf. Educ. Credit Mgmt. Corp. v. Carter, 279 B.R. 872, 874, 878 (M.D. Ga.
2002) (no undue hardship where the debtor failed to show that her childcare costs
were likely to remain the same in the future).
Furthermore, Conniff’s future ability to earn extra income to repay her
educational loans is not bleak. See In re Frushour, 433 F.3d at 401 (“While [the
debtor’s present financial condition is certainly not desirable, the second Brunner
factor is prospective in nature and looks for exceptional circumstances beyond the
debtor’s current situation.”). Conniff has acknowledged that additional sources of
income will be easier to pursue when her sons are emancipated. In particular, the
unspecified costs for childcare and “eating out” that Conniff incurs for working extra
jobs, which include providing translations for the board of education and working as
an adjunct professor in Montgomery, will diminish as her teenaged sons age. (Doc.
# 2-11, at 16); see In re Frushour, 433 F.3d at 402 (Since the second Brunner element
“looks to the future, it is not implausible to think that [the debtor’s] childcare costs
will drop as her child progresses in school.”). Additionally, Conniff’s testimony
21

establishes that annual pay raises, even if in her opinion they are small, are not
foreclosed and that she will receive step increases in pay every three years. Her
testimony demonstrates also that there are higher-paying jobs available in school
administration within her district for which her advanced degrees render her
qualified. (See Doc. # 2-11, at 40–41.) There is no evidence that she is precluded
from applying again for future openings. These opportunities show a prospect for
increased income in the future. In re Mallinckrodt, 274 B.R. 560, 567–58 (S.D. Fla.
2002) (finding that, under Brunner’s second element, the debtor “has the burden to
prove that he cannot earn more money in the years to come,” id. at 567, and that the
debtor had not demonstrated additional circumstances because he had future
“opportunities to earn more income,” id. at 568).
Finally, a comparison of Conniff’s circumstances against those the debtor in
Mosley faced further illustrates why Conniff has failed to show “a certainty of
hopelessness that [she] will be able to repay the loans within the repayment period.”
In re Mosley, 494 F.3d at 1326 (internal citations and quotation marks omitted). The
Mosley debtor amassed $45,000 in student debt for college, but was unable to
graduate or perform manual labor jobs after he suffered serious injuries in an
accident. He later was committed to a mental health facility, diagnosed with
depression and anxiety, and prescribed medications that rendered “him unable ‘to
function.’” Id. at 1323. His circumstances worsened; he became homeless, had no
22

automobile, and survived on food stamps and disability benefits. The Eleventh
Circuit held that “Mosley’s evidence of medical problems, lack of skills, and dire
living conditions support[ed] the bankruptcy court’s finding that it is highly unlikely
he will become able to repay his loans.” Id. at 1326–27.
Conniff’s circumstances stand in stark contrast to the certain hopelessness the
debtor in Mosley faced. Notwithstanding her medical conditions, Conniff has been
able to maintain steady full-time employment, earning nearly $60,000 annually at
the time of her adversary proceedings, and there is no indication that she will not
retain her tenured job, with the potential for some salary raises, should she choose to
remain in her school district.10 Moreover, unlike the debtor in Mosley, Conniff holds
multiple marketable degrees. She graduated from college with a bachelor’s degree,
holds two master’s degrees, and has earned her Ph.D. She has a roof over her head,
an automobile, and food for the table.

Her circumstances do not qualify as

“additional” within the meaning of Brunner’s second element.11

10

It is notable that, although not a dispositive factor, Conniff’s professional job earns her
more than the median income in her area. FY 2015 HUD Income Limits show that the median
income for a family of four in rural Alabama is $48,500. U.S. Dep’t of Hous. & Urban Dev. Office
of Policy Dev. & Research, FY 2015 HUD Income Limits Briefing Material, 38 (Mar. 10, 2015),
http://www.huduser.gov/portal/datasets/il/il15/index.html. The median income for a family of
three in rural Alabama is $43,650. See id. at 9 (indicating that the percentage adjustment for a
family of three is 90%).
11

Courts have found that debtors did not establish additional circumstances in situations
more dire than the circumstances Conniff endures. These decisions show that courts give little
weight to present hardships in assessing a debtor’s future prospects and ability to pay. See Spence
v. Educ. Credit Mgmt. Corp. (In re Spence), 541 F.3d 538, 544 (4th Cir. 2008) (finding no
additional circumstances despite debtor’s low-paying job and her diabetes and high blood pressure
23

V. CONCLUSION
Although Conniff admittedly finds herself in undesirable financial difficulties,
she ultimately must bear the consequences of her decision to obtain loans in order to
pursue her multiple educational goals. See In re Cox, 338 F.3d at 1242 (“If the
leveraged investment of an education does not generate the return the borrower
anticipated, the student, not the taxpayers, must accept the consequences of the

because the ailments did not affect her ability to work full-time and the low-paying job was the
choice of the debtor, as she had a master’s degree and had completed Ph.D. course work, which
would have allowed her to seek higher-paying employment); Tirch v. Penn. Higher Educ.
Assistance Agency (In re Tirch), 409 F.3d 677, 681–82 (6th Cir. 2005) (determining that the debtor
had failed to show how her condition prevented her from working and thus had failed to establish
additional circumstances, even though she was not currently employed and testified that she did
not know when or if she would be able to return to work); In re Brightful, 267 F.3d at 330
(overturning bankruptcy court’s finding of additional circumstances based on emotional and
psychiatric problems of the debtor because there was no indication of how these problems kept her
from being “gainfully employed”; determining that because the debtor was “intelligent, physically
healthy, currently employed, possess[ing] useful skills as a legal secretary, and [had] no
extraordinary, non-discretionary expenses,” she failed to satisfy the burden of showing additional
circumstances); Ng-A-Qui v. Coll. Assist (In re Ng-A-Qui), No. 14-1551, 2015 WL 5923363, at *8
(9th Cir. B.A.P. 2015) (affirming bankruptcy court’s finding of no additional circumstances
because, although the debtor was currently unemployed, she was “healthy, well-educated, and
well-spoken”; the court also noted that the debtor had made only two attempts to secure
employment since 2012); Trudel v. U.S. Dep’t of Educ. (In re Trudel), 514 B.R. 219, 228 (6th Cir.
B.A.P. 2014) (affirming bankruptcy court’s finding of no additional circumstances because the
debtor failed to establish that her medical issues prevented her from improving her financial
condition, even though her medical issues prevented her from working more than thirty-two hours
a week); Educ. Credit Mgmt. Corp. v. Boykin (In re Boykin), 313 B.R. 516, 522–23 (M.D. Ga.
2004) (rejecting bankruptcy court’s conclusion that additional circumstances existed where the
debtors did not have a college degree or marketable skills above a minimum wage level, debtors
had two young children, one debtor had back problems, and one debtor had dysgraphia; the district
court did not find these circumstances to be “unique” or “extraordinary” but reversed the decision
on other grounds); In re Mallinckrodt, 274 B.R. at 567–68 (reversing decision of the bankruptcy
court that additional circumstances existed, because although the debtor had not been able to earn
money in the past, he had potential sources of income and he had not proven “significant barriers”
to such gainful employment).
24

decision to borrow.”). She has failed to show that her purported “inability to pay [is]
likely to continue for a significant time, such that there is a certainty of hopelessness
that [she] will be able to repay the loans within the repayment period.” In re Mosley,
494 F.3d at 1326 (internal citations and quotation marks omitted). Accordingly, the
bankruptcy court erred in concluding that Conniff met her burden of establishing the
second Brunner element; therefore, its ultimate conclusion that Conniff’s student
loan debt was dischargeable under § 523(a)(8) must be reversed.
It is ORDERED that the bankruptcy court’s March 25, 2015 judgment is
REVERSED and that this action is REMANDED to the bankruptcy court for an entry
of judgment in favor of Appellant ECMC.
A final judgment will be entered separately.
DONE this 2nd day of May, 2016.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE

25