23 Am. Bankr. Inst. L. Rev. 327 (2015)
Bankruptcy and Education

handle is hein.journals/abilr23 and id is 327 raw text is: 











BANKRUPTCY AND EDUCATION


                                  KEITH SHARFMAN*

    Bankruptcy law interacts with education law in a number of respects. A bankrupt
educational institution loses access to student financial aid,1 and its accreditation status
is excluded from the bankruptcy estate.2 Actions by accreditation agencies against
bankrupt educational institutions are not subject to the automatic stay.3 And absent a
showing of undue hardship, student loans are not dischargeable in bankruptcy.'
    The exceptional treatment of educational institutions and their students in
bankruptcy reflects a fundamental tension between the goals of bankruptcy law on the
one hand and education policy on the other. While bankruptcy law generally seeks to
maximize value for creditors and afford a fresh start to individual debtors,' it balances
these objectives with the goals of education policy, which include assuring educational
quality, access, and affordability, as well as protecting the investment of public funds in
the educational sector.6
    Whether current law achieves the correct balance or ought to be rethought and
reformed was the subject of a symposium that the American Bankruptcy Institute Law
Review hosted at St. John's School of Law on October 24, 2014. The event brought
together distinguished experts in the fields of bankruptcy and education law, and their
contributions are published here in this symposium issue. These papers are especially
timely in light of recent news events concerning high profile insolvencies in the higher
education sector and pending legislation to reauthorize the Higher Education Act. And
they will be of particular interest, given how little attention the intersection between
these two subject areas has received until now.
    The six symposium contributions cover various topics that fall within the broader
conference theme. Some of them focus on issues that primarily affect institutions.
Others emphasize issues of concern to students and to society more broadly. Each
contribution is unique in content and offers a diverse perspective.


  * Professor of Law & Associate Director of Bankruptcy Studies, St. John's University School of Law.
Many thanks to all of the symposium participants for their participation, their efforts, and their insights, to
Terry Hartle and Robert Witwer for some very helpful suggestions, to Sam Gerdano, Andrew Simons, and
Michael Simons for supporting this event, and to Kelly Porcelli and the other editors and staff of the
American Bankruptcy Institute Law Review for their hard work.
  ' 20 U.S.C.  1002(a)(4).
  2 11 U.S.C.  541(b)(3).
  3 11 U.S.C.  362(b)(14).
  4 11 U.S.C.  523(a)(8).
  5 Thomas H. Jackson, Bankruptcy, Non-Bankruptcy Entitlements, and the Creditors' Bargain, 91 YALE.
L.J. 857 (1982); Jackson, The Fresh-Start Policy in Bankruptcy, 98 HARV. L. REv. 1393 (1985).
  6 See generally the various provisions concerning access, affordability, quality, and the protection of
federal funds contained in the Higher Education Act, which is codified at 20 U.S.C.  1001 et seq.

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