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Court: Ex-cadet must repay academy cost despite bankruptcy
PHILADELPHIA - A man discharged from the U.S. Air Force Academy for letting his girlfriend use a government credit card must repay his $123,000 educational debt despite filing for bankruptcy, an appeals court ruled.
The decision this week comes as a relief to the Pentagon, which fought an adverse bankruptcy court decision that could have set a costly precedent.
The bankruptcy judge had said service-academy debts could be discharged - or rendered unenforceable - five years after a bankruptcy petitioner leaves active duty.
"That would have been of great concern to the services," Assistant U.S. Attorney Virginia Powel said. "There was a great deal of interest from the Pentagon."
Under federal bankruptcy law, government-backed student loans cannot typically be discharged unless the petitioner proves severe hardship.
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Court: Ex-AFA cadet must repay academy cost despite bankruptcy
The decision this week comes as a relief to the Pentagon, which fought an adverse bankruptcy court decision that could have set a costly precedent.
The bankruptcy judge had said service-academy debts could be discharged -- or rendered unenforceable -- five years after a bankruptcy petitioner leaves active duty.
"That would have been of great concern to the services," Assistant U.S. Attorney Virginia Powel said. "There was a great deal of interest from the Pentagon."
Under federal bankruptcy law, government-backed student loans cannot typically be discharged unless the petitioner proves severe hardship.
Former cadet Nathan James Udell argued that his case fell under a more narrow statute that covers service-academy debts. That statute says the debt cannot be discharged in the first five years after active duty -- but says nothing about later years.