Lapusan v. Educational Credit Management Corp. (In Re Lapusan)

OPINION

KENNETH J. MEYERS, Bankruptcy Judge.

The issue before the Court is whether a consolidated loan, the proceeds of which were used to pay preexisting student loans, is itself an “educational loan” under 11 U.S.C. § 523(a)(8). The facts are not in dispute.

On May 31, 1991, Gregory Lapusan consolidated five of his student loans pursuant to the Higher Education Act (“HEA”). As a result of the consolidation, the original student loans (totaling $18,129.18) were paid in full. The consolidated loan provided for a lower interest rate and lower monthly payments than the five original student loans.…