YOU BE THE JUDGE WRITING PROBLEM Lydia D’Ettore received a degree in computer programming at DeVry Institute of Technology, with a grade-point average of 2.51. To finance her education, she borrowed $20,516.52 from a federal student loan program. After graduation she could not find a job in her field, so she went to work as a clerk at a salary of $12,500.

D’Ettore and her daughter lived with her parents free of charge. After setting aside $50 a month in savings and paying bills that included

$233 for a new car (a Suzuki Samurai) and $50 for jewelry from Zales, her disposable income was $125 per month. D’Ettore asked the bankruptcy court to discharge the debts she owed DeVry. Under the Code these student loans cannot be discharged unless they impose an

“undue hardship” on the debtor. Did the debts to DeVry Institute impose an undue hardship on D’Ettore? Argument for D’Ettore: Lydia D’Ettore lives at home with her parents. Even so, her disposable income is a meager $125 a month. She would have to spend every single penny of her disposable income for nearly 15 years to pay back her $20,000 debt to DeVry.

That would be an undue hardship. Argument for the Creditors: The U.S. government guaranteed D’Ettore’s loan. Therefore, if the court discharges it, the American taxpayer will have to pay the bill. Why should taxpayers subsidize an irresponsible student? D’Ettore must also stop buying new cars and jewelry. And why should the government pay her debts while she saves money every month?