Our law firm Phillips & Thomas, LLC continues its winning record in student loan litigation with two recent cases decided in Federal Court in Kansas in July 2025.  The first case was tried before the U.S. Bankruptcy Court for the District of Kansas, and the Court’s ruling was handed down on July 16, 2025. 

In this case, the Plaintiffs were a married couple in their mid-fifties. They had a total of around $250,000 in student loans from both private lenders and the U.S. Department of Education.  Their track records of employment were good, but the size of the loans prevented them from making any real progress in paying them off, despite their good faith efforts.  The Court found that, even after completing their Chapter 13 bankruptcy, they still were experiencing persistent financial difficulties. 

Applying the Brunner test to determine the dischargeability of student loans, the Court first looked at whether the Plaintiffs could maintain a minimal standard of living if forced to pay off the student loans.  The clear answer to this question was no.  Two of the creditors argued that the Plaintiffs could have enrolled in an “income driven repayment plan.” This is a common argument made by student loan creditors, and it rarely holds water. The Court rejected the creditors’ position:

Aside from the issue of whether the SAVE plan remains a viable repayment option, the question is not whether Plaintiffs can afford the minimum monthly payments but whether Plaintiffs’ $586.81 disposable income is sufficient to repay their cumulative federal student loan balance of $165,361.51 over the 20-year repayment period required by most income-driven repayment plans…With more interest compounding each month, Plaintiffs, even if they make every payment during the 20-year repayment period, would never see their principal balances decrease, and they may be left with a significant tax burden when the loan balances are ultimately forgiven.

The Court next held that the Plaintiffs’ condition was likely to persist in the foreseeable future.  It was unlikely that their income levels would rise significantly enough in the future that much more could be paid towards the student loans. They had also made good faith efforts to repay the loans.  Case law in the District of Kansas allows for partial discharge of student loans: it is not an “all or nothing” proposition. This was the remedy the Court applied.  Ruling that the Plaintiffs could pay some of the debt back, it discharged all of the debt except for $62,900 of it.  This amount would be divided pro rata among the three student loan creditors, and no interest would accrue on this amount.  This result gave the grateful Plaintiffs the fresh start they needed.  This case once again demonstrated the power of Kansas’s humane and compassionate view that partial discharges of student loans can be a flexible and equitable remedy.

A second student loan litigated case was also resolved in July 2025.  In this case, the Plaintiff was a nurse in her late 50s who had, since the end of her Chapter 13 case, experienced severe difficulty in finding employment. The parties conducted extensive discovery, and the case was set for trial.  However, the matter was eventually resolved through settlement.  The Plaintiff had $328,000 of her student loans discharged. She remained only responsible for about $35,000.  This represented a tremendous result for the Plaintiff, who was finally given the fresh start she desperately needed.

These two cases represent a continuation of the favorable trends that have developed in student loan litigation in recent years.  Partial discharge is now an established reality, at least in Kansas.  Creditors, however, are still expending significant resources in fighting these cases, and those who undertake such litigation need to be prepared for the proverbial “long haul.”  

If you are contemplating filing a bankruptcy in Missouri or Kansas in order to try to wipe out student loans and would like to schedule a free initial consultation with our law firm, please contact us at 913-385-9900 or schedule online via our calendy link.