United States Bankruptcy Appellate Panel
                         For the Eighth Circuit
                     ___________________________

                             No. 15-6031
                     ___________________________

                             In re: Mary A. Hurst

                             lllllllllllllllllllllDebtor

                           ------------------------------

                                 Mary A. Hurst

                     lllllllllllllllllllll Plaintiff - Appellant

                                         v.

     Southern Arkansas University; Renee S. Williams, Chapter 7 Trustee

                   lllllllllllllllllllll Defendants - Appellees
                                    ____________

                Appeal from United States Bankruptcy Court
              for the Western District of Arkansas - El Dorado
                              ____________

                           Submitted: May 19, 2016
                             Filed: July 19, 2016
                                ____________


Before FEDERMAN, Chief Judge, SALADINO and SHODEEN, Bankruptcy
Judges.
                                 ____________
FEDERMAN, Chief Judge.

      Debtor Mary A. Hurst appeals from the Bankruptcy Court’s 1 order denying
her request to discharge her student loan for undue hardship pursuant to 11 U.S.C. §
523(a)(8). For the reasons that follow, we affirm.

                           FACTUAL BACKGROUND

      The Debtor obtained a $4,000 federal Perkins student loan while attending
Southern Arkansas University, majoring in education, for the 1994 – 1995 academic
year. At the end of that school year, she traveled to Texas for a summer job and
broke her ankle which, she testified, made it impossible for her to return to SAU for
the following semester. She had two surgeries and therapy on the ankle, and was on
crutches for a year and a half. While still in Texas recovering from the ankle injury,
she was involved in a car accident and totaled her car, further preventing her from
returning to SAU. The Debtor remained in Texas until about 2009, when she moved
back to Magnolia, Arkansas, where she owned a home. She never returned to school.

      The Debtor is 66 years old, and plans to work to age 70. She has vision
problems as a result of an unsuccessful cataract surgery, and hearing problems, as
well as some occasional problems with her ankle. As discussed more fully below,
the Debtor is employed, working part-time at SAU’s cafeteria, and collects social
security benefits. She has no mortgage on her home, although it took her some
amount of time (and money) to repair vandalism damage which had occurred while
she was away in Texas.




      1
       The Honorable Richard D. Taylor, United States Bankruptcy Judge for the
Western District of Arkansas.
                                          -2-
      Before the Debtor went into default on the student loan, the regular payment
amount was $42. She never made a single voluntary payment on the loan, although
- 3 -SAU intercepted approximately $600 in income tax refunds and applied that to
the balance. As of the date of trial, the balance on the student loan was $7,476.78.

      The Debtor filed a Chapter 7 bankruptcy case on February 11, 2011. She did
not list SAU as a creditor, but reopened the case on November 25, 2014 to seek a
discharge of her student loan as an undue hardship pursuant to § 523(a)(8) of the
Bankruptcy Code. Following a trial, the Bankruptcy Court held that the Debtor
failed to prove that her student loan debt should be discharged. The Debtor appeals.

                                   STANDARD OF REVIEW

      We review the Bankruptcy Court’s determination of undue hardship de novo.2
Subsidiary findings of fact on which the legal conclusions are based are reviewed
for clear error.3 We may affirm on any basis supported by the record. 4



              UNDUE HARDSHIP DISCHARGE OF STUDENT LOANS
      Section 523(a)(8) of the Bankruptcy Code provides that student loans are
nondischargeable “unless excepting such debt from discharge . . . would impose an
undue hardship on the debtor and the debtor’s dependents.” 5 In the Eighth Circuit,

      2
      In re Long, 

, 544 (8th Cir. 2003); Educational Credit
Management Corporation v. Jesperson, 

, 779 (8th Cir. 2009).
      3
          

; In re Reynolds, 

(8th Cir. 2005).
      4
          Kaler v. Charles (In re Charles), 

, 687 (B.A.P. 8th Cir. 2012).
      5
          11 U.S.C. § 523(a)(8).
                                                -3-
courts apply a totality-of-the-circumstances test in determining whether a student
loan should be discharged as an undue hardship. 6 Under this test, courts must
consider the debtor’s past, present, and reasonably reliable future financial
resources; the debtor’s reasonable and necessary living expenses; and any other
relevant facts and circumstances.7 The debtor has the burden of proving undue
hardship by a preponderance of the evidence.8 The burden has been described as
“rigorous”: “Simply put, if the debtor’s reasonable future financial resources will
sufficiently cover payment of the student loan debt – while still allowing for a
minimal standard of living – then the debt should not be discharged.” 9



      The Debtor here expressly states in her Brief on appeal that she does not take
issue with the Court’s findings of fact, which were made on the record at the
conclusion of the trial. 10 Rather, she contends that the facts lead to the inescapable
conclusion that she will suffer an undue hardship if her student loan is not
discharged. She asserts that, rather than focusing on her financial circumstances and
ability to pay, the Bankruptcy Court focused too heavily on the fact that she has
never made any attempt to repay the student loan. We disagree, but in any event,
the Court made ample factual findings sufficient to support its conclusion that the

      6
        Nielsen v. ACS, Inc. (In re Nielsen), 

, 759 (B.A.P. 8th Cir.
2012), aff’d 502 Fed. Appx. 634 (8th Cir. 2013).
      7
           Id. (citing 

).
      8
           

(quoting 

).
      10
           See Appellant’s Brief at 20.

                                                 -4-
Debtor has income sufficient to maintain a minimal standard of living while making
payments on the student loan.


                      The Debtor’s Past, Present, and Reasonably
                         Reliable Future Financial Resources

      As stated, the Debtor has the burden of proving that she does not have
reasonably reliable current or future financial resources to make payments on her
student loan. When a student loan dischargeability adversary proceeding is brought
years after the bankruptcy discharge was entered, as was the situation here, a
bankruptcy court should consider the debtor’s financial circumstances between her
Chapter 7 discharge and the trial date. 11 The Court found that the Debtor has
resources sufficient to pay on her student loan, and that she plans to continue
working for approximately four more years until retirement.

      The Debtor testified concerning her employment history: While she was in
Texas after leaving SAU, she worked at a convenience store for two years, earning
$600 - $800 per month, and then for a limousine company, earning $1,500 - $1,600
per month. After she moved back to Magnolia, she worked as an advocate at an area
women’s shelter, earning $1,000 per month. At some point after 2011, she left
employment at the shelter and got a job with Aramark at the cafeteria at SAU,
running the cash register, sweeping the floors, and cleaning tables. The cafeteria is
not open during the summer months or Christmas break, but the Debtor testified she
is able to occasionally work some hours on catering jobs through Aramark during
those time periods. She also collects social security, as well as unemployment


      

. Sallie Mae Serv. Corp. (In re Walker), 

, 1231 (8th
Cir. 2011).

                                              -5-
benefits during times of under-employment. The Court found that Debtor failed to
offer any evidence showing that she attempted to find work during the summers or
other school vacation periods. The Court also found that she made no effort to use
income tax refunds toward payments on her student loan.

      The Debtor’s schedules, which were offered as evidence at trial, showed that
when the Debtor filed her bankruptcy case in 2011, she was earning $1,000 a month
in wages from the women’s shelter, plus $818 in social security benefits, for total
income of $1,818.

      As stated, the Debtor stopped working at the shelter at some point after the
bankruptcy filing and began working for Aramark at the cafeteria. She testified that,
at the time of trial, she was earning around $600 - $700 per month from Aramark,
pre-tax, during the school year. She testified she earns less during the summer
months, but she also collects some unemployment benefits during those months. In
addition, she testified she now receives about $1,000 per month from social security.
As a result, her testimony was that she receives a total of about $1,600 - $1,700 per
month, pre-tax, during the school year, and less during the summer months. The
Court found the Debtor’s testimony overall to be credible.

      The documentary evidence admitted at trial further supports the Court’s
conclusion that she had income sufficient to make payments. The evidence shows
that the Debtor actually earns about $1,600 - $1,700, on average, year-round.
Specifically, the Debtor submitted her 2013 and 2014 income tax returns as evidence
at trial. According to the tax returns, in 2013, the Debtor received $11,250 in wages
and $13,365 in social security, for a total of $24,615. In 2014, she earned $6,320 in
wages, $115 in unemployment compensation, and $13,563 in social security, for a
total of $19,998. Thus, the tax returns showed Debtor earned an average of

                                              -6-
$2,051.25 per month in 2013,12 and $1,666.50 in 2014.13 Also, the tax returns
indicate that modest amounts had been withheld from her paychecks for taxes, as the
Court found. 14

      The Debtor also submitted Aramark paystubs and her checking account
statements for the three months from May 19, 2015 through August 17, 2015. The
checking account statements showed deposits from paychecks and unemployment
benefits totaling $754, $690, and $500 for those three months, respectively. These
would, of course, be the net amounts after taxes were withheld. The Debtor testified
that her social security benefits of approximately $1,000 are deposited into a separate
savings account.

      However, the tax returns showed the Debtor was in fact receiving $13,300 to
$13,500 per year in social security in 2013 and 2014, approximately $1,100 per
month. Thus, based on her testimony and the documentary evidence, the Debtor’s
income totaled $1,600 - $1,854 per month in the summer of 2015, which is consistent
with the 2013 and 2014 tax returns showing an average of $1,666 - $2,000 per
month. The Court found that the Debtor has average income of $1,818 per month,
which is amply supported by the evidence.




      12
           $11,250 + $13,365 ÷ 12 = $2,051.25.
      13
           $6,320 + $115 + $13,563 ÷ 12 = $1,666.50.
      14
        The Debtor received federal income tax refunds of $541 in 2013 and $350
for 2014.

                                                 -7-
                  The Debtor’s Reasonable and Necessary Living Expenses

      The second factor in the totality of the circumstances test is the Debtor’s
reasonable and necessary living expenses. “To be reasonable and necessary, an
expense must be modest and commensurate with the debtor’s resources.” 15 “Simply
put, if the debtor’s reasonable financial resources will sufficiently cover payment of
the student loan debt – while still allowing for a minimal standard of living – then
the debt should not be discharged.” 16

      SAU did not argue at trial, nor does it here, that any of the Debtor’s particular
expenses are unreasonable or unnecessary. Rather, the question is whether the
Debtor has income remaining after paying those expenses with which to make her
student loan payments.

      The evidence concerning current expenses was sparse at trial.               The
documentary evidence concerning expenses is limited to the Debtor’s Schedule J
from 2011. As the Bankruptcy Court found, Schedule J showed expenses totaling
$1,779.02, leaving $38.98 in net income in 2011.

      The only specific evidence about the Debtor’s current expenses was her
testimony that she no longer has a car payment, which was $297. On that point, the
Debtor testified generally that she needs the extra $297 “to live on,” but she did not
point to any specific expense which now eats up those extra funds. And, although
she said that that using some of that money to make student loan payments would


      15
        

(citation and internal quotation marks
omitted).
      16
           

(citation omitted).

                                               -8-
“make things harder on [her],” she acknowledged that some of that money could go
toward making a payment. The Bankruptcy Court found that part of the $297 per
month could go toward student loan payments.

      This finding was supported by the evidence. The Eighth Circuit has said on
more than one occasion that “[a] court may not engage in speculation when
determining net income and reasonable and necessary living expenses.” 17 Bearing
in mind that the Debtor bears the burden of proving that she has no excess funds
with which to make the student loan payment, there simply was no evidence as to
how the $297 might be being spent. The Debtor’s budget is modest, but a finding
that she is spending the $297 on living expenses, without evidence of that, would
require speculation. In sum, without actual evidence as to how the Debtor’s
expenses might have otherwise changed since 2011, the only evidence was that the
Debtor now has monthly expenses of $1,482.02. With income averaging at least
$1,800 per month, as found by the Court and discussed above, the record shows she
has sufficient income to make the $42 student loan payment and the Bankruptcy
Court did not clearly err in so finding.

                          Other Relevant Facts and Circumstances

      “Because the totality-of-the-circumstances test is ‘very broad,’ courts in the
Eighth Circuit have looked to a number of facts and circumstances to assist them in
making this determination.” 18 Such factors include:

      (1) total present and future incapacity to pay debts for reasons not
      within the control of the debtor; (2) whether the debtor has made a good

      17
           

(quoting 

).
      18
           

(Smith, concurring) (citation omitted).

                                                -9-
      faith effort to negotiate a deferment or forbearance of payment; (3)
      whether the hardship will be long-term; (4) whether the debtor has
      made payments on the student loan; (5) whether there is permanent or
      long-term disability of the debtor; (6) the ability of the debtor to obtain
      gainful employment in the area of the study; (7) whether the debtor has
      made a good faith effort to maximize income and minimize expenses;
      (8) whether the dominant purpose of the bankruptcy petition was to
      discharge the student loan; and (9) the ratio of student loan debt to total
      indebtedness.19
These are mere factors for a court to consider, and a court need not address each and
every one of them, particularly where there is no evidence, one way or the other,
concerning a factor.

      The Court found that the Debtor has the ability to make some payments on
her student loan debt, so the first factor weighed against dischargeability. Next, the
court found that she had made no effort to obtain deferment or forbearance on her
loan. As to whether the hardship imposed by loan payments would be long term,
the Court found that she has the ability to make payments, at least until her
retirement. The Court further found that she has not made payments voluntarily on
the loan. The Court did find that she had hearing and vision problems which could
affect her ability to earn income, but there was no evidence that such problems would
lead to a reduction in her income during the time that she continues to work. Indeed,
the Debtor testified she intends to continue to work until age 70. With regard to the
sixth factor, the evidence was that she has not been able to obtain gainful
employment in the field of education. As far as the Debtor having made a good faith
effort to maximize income and minimize expenses, the Court held there was no
evidence she had attempted to supplement her income during the school vacation


      19
           

(Smith concurring) (citation omitted).
                                                - 10 -
periods, or that she had used tax refunds toward student loan payments. There was
no evidence offered as to the eighth and ninth factors. Thus, the Bankruptcy Court
considered all the enumerated factors for which evidence was offered.

      Nevertheless, the Debtor asserts that the Court placed a significant amount of
emphasis on the second and fourth factors, namely, that she had not made a single
voluntary payment on, or otherwise attempt to even address, her student loan in the
twenty years since she incurred them, despite the fact that the payments were only
$42 per month.

      The Eighth Circuit said in In re Jesperson that, “[w]ith the receipt of a
government-guaranteed education, the student assumes an obligation to make a good
faith effort to repay those loans, as measured by his or her efforts to obtain
employment, maximize income and minimize expenses.” 20 In essence, what the
Bankruptcy Court concluded was that, to the extent that requiring the Debtor to repay
the loan – given her age and the current balance of nearly $7,500 – could be viewed
as an undue hardship, those circumstances were of the Debtor’s own making,
inasmuch as she never made any attempt at all to pay or otherwise address the student
loan in more than twenty years. 21 Although the facts in Jesperson are dissimilar to
those here, the Eighth Circuit has said:

      While the size of student loan debts relative to the debtor’s financial
      condition is relevant, this should rarely be a determining factor: it

      

(citations omitted).

      21
         Accord, Johnson v. Dept. of Educ. (In re Johnson), 

, 609-610
(Bankr. W.D. Mo. 2015) (holding that choosing to take out loans later in life,
entering multiple deferments, and making no payments – resulting in debtor being
post-retirement age at the conclusion of the repayment plan – did not warrant a
discharge of student loans).
                                               - 11 -
      would be perverse to allow the debtor to benefit from [his] own
      inaction, delay and recalcitrance by automatically granting a discharge
      simply because the debt is a sizeable one. This, of course, would
      benefit those who delay and obstruct the longest and could encourage
      other students to follow the [same] course. 22
      As the Bankruptcy Court acknowledged, the standard for discharging student
loans in the Eighth Circuit is onerous, and the Debtor bears the burden of proving
undue hardship. While the Court acknowledged that the Debtor’s circumstances
were “sympathetic,” it concluded that she had not proven that she lacked ability to
make student loan payments while maintaining a minimal standard of living, given
the evidence of her income and expenses, and despite the fact that the balance had
ballooned due to nonpayment.          The Court found that the other facts and
circumstances it considered did not justify a different result. Those factual findings
were not clearly erroneous.

      Finally, the Eighth Circuit has said that the availability of an income-based
repayment program is an important factor to consider in discharging student loans.23
Here, SAU’s representative testified that, because the university still holds the loan,
it is not subject to the Department of Education’s frequently-discussed income-based
programs.     However, the representative testified that the loan could be
“rehabilitated” through twelve months of negotiated payments, at which time the
loan would come out of default status and the Debtor could resume the $42 monthly


      22
        

(quoting United States v. Kephart, 

, 792 (W.D. N.Y. 1994)).

      23
        In re 

(“Although some question remains as to
the weight to be given to the ability to make an [IBRP] payment following
Jesperson, the Eighth Circuit made it clear that the ability to do so is, at a
minimum, an important factor in the analysis.”).
                                               - 12 -
payments. As stated, the Debtor never applied to participate in that rehabilitation
program, and so was not able to offer any evidence as to what her payment would
be during the one-year rehabilitation period. Nevertheless, the evidence showed that
she has the ability to make payments in excess of $42 per month, at least during the
year required.

      The dissenting opinion points out that the Bankruptcy Court – and this panel
– cannot speculate in making student loan determinations. In other words, student
loan cases must be decided based only on the evidence offered. And, the Debtor
carries both the burden of going forward with the evidence, and the burden of
persuasion as to the outcome. Here, as to the Debtor’s present ability to make
payments, except as to the vague testimony that she uses all of her income “to live
on,” the evidence was uncontradicted that the Debtor has up to $300 per month in
income available with which she could be making student loan payments. The
Debtor has, therefore, failed to prove that she lacks the present ability to make
payments on her student loans. Perhaps the Debtor could have proven that she has
current expenses in excess of her income, but she did not do so. Therefore, her action
seeking discharge of her student loan as an undue hardship must fail.24

                                     CONCLUSION

      For the reasons stated, the Bankruptcy Court did not err in holding that the
Debtor did not meet her burden of proving that repayment of the student loan would



      24
        In re 

(suggesting in dicta that § 523(b) and
Federal Rule of Bankruptcy Procedure 4007(b) may permit debtors to seek a
discharge of student loans in a second bankruptcy case, based on changed
circumstances, notwithstanding a determination of nondischargeability in a prior
case).
                                             - 13 -
impose an undue hardship on her.            ACCORDINGLY, the Judgment of the
Bankruptcy Court is AFFIRMED.



SHODEEN, Bankruptcy Judge dissenting.

      The majority concludes that sufficient facts support the bankruptcy court’s
determination that Hurst does not qualify for discharge of her student loans for undue
hardship. I believe this result rests upon an overly narrow application of the totality
of the circumstances test, and, therefore, I respectfully dissent.

      Discharge of student loan debt in bankruptcy is governed by 11 U.S.C. §
523(a)(8) which in relevant part states: “[a] discharge under section 727 . . . of this
title does not discharge an individual debtor from any debt unless excepting such
debt from discharge under this paragraph would impose an undue hardship on the
debtor and the debtor's dependents.” The intent of this statute is to prevent abuse of
the bankruptcy system by undeserving students seeking to discharge their student
loan obligations. Andresen v. Neb. Student Loan Program, Inc. (In re Andresen),

, 130 (B.A.P. 8th Cir. 1999). The term undue hardship is not defined
in the Bankruptcy Code. Consequently, the standards to determine what constitutes
undue hardship have been developed by the courts. There are two primary tests used
to evaluate whether an undue hardship exists for discharge of student loans. The
majority of Circuits follow the test adopted by the Second Circuit in Brunner v. New
York State Higher Education Services Corp., 

(2d Cir. 1987). Under
Brunner, three required elements must be met to establish an undue hardship: (1)
the debtor cannot maintain, based on current income and expenses, a “minimal”
standard of living for herself and her dependents if forced to repay the loan; (2)
additional circumstances exist that indicate this state of affairs is likely to persist for
                                               - 14 -
a significant portion of the repayment period of the student loans; and (3) the debtor
has made good faith efforts to repay the loans. 

          Many debtors fail to meet the rigid standards imposed by the Brunner test,
which has been expressly rejected by the Eight Circuit:

                We are convinced that requiring our bankruptcy courts to
                adhere to the strict parameters of a particular test would
                diminish the inherent discretion contained in § 523(a)(8) .
                . . . We believe that fairness and equity require each undue
                hardship case to be examined on the unique facts and
                circumstances that surround the particular bankruptcy.
Long v. Educ. Credit Mgmt. Corp. (In re Long), 

, 554 (8th Cir. 2003).
Instead, we apply a more flexible approach under the totality of the circumstances
test, which has three components: (1) the debtor’s past, present, and reasonably
reliable future financial resources; (2) a calculation of the debtor’s and her
dependent’s reasonable necessary living expenses; and (3) any other relevant facts
and circumstances surrounding each particular bankruptcy case. 

facts contained in the record to all three areas of inquiry, I believe an undue hardship
exists.

          1.    Past, Present and Future Financial Resources

          According to her original Schedules I and J, Hurst did not have sufficient
income to make her student loan payment at the time she filed bankruptcy. While
she no longer has to make her $297 per month car payment, this saving is offset by
Hurst’s decreased income. On a month when she works all of the hours available to
her at Aramark, Hurst makes $300 to $400 less than what she was able to make
working at the shelter. Also of note is the fact that Hurst’s monthly income is not
consistent due to the sporadic availability of work at Aramark. To calculate her

                                                 - 15 -
average monthly income based upon her annual income may not truly reflect the
actual amount she receives from wages and unemployment in a given month when
school is not in session.

      Additionally, both the majority and the bankruptcy court overlook the relevant
inquiry into the reliability of Hurst’s future income to make the loan payments. See

(discussing evidence that debtor could enjoy sustained
legal employment); Nielsen v. ACS, Inc. (In re Nielsen), 

, 759-60
(B.A.P. 8th Cir. 2012) (emphasizing debtor’s ability for professional advancement
and likelihood of future tax refunds), aff’d 502 Fed. App’x 634 (8th Cir. 2013); Ford
v. Student Loan Guar. Found. of Ark. (In re Ford), 

, 676 (B.A.P. 8th
Cir. 2001) (finding that debtor’s worsening arthritic condition will decrease future
ability to work and increase medical costs). Hurst earns $7.50 an hour at her job.
According to her tax return, her combined income from all sources in 2014 was
$19,883 which included her gross wages ($6,320), unemployment ($115) and social
security benefits ($13,563). There are no facts to suggest that these amounts will
increase in the foreseeable future. Instead the record shows that Hurst’s hearing and
vision problems will almost certainly affect her ability to work. See Reynolds v. Pa.
Higher Educ. Assistance Agency (In re Reynolds), 

, 532 (8th Cir. 2005)
(declining to ignore the reality that in many cases “a debtor’s health and financial
position are inextricably intertwined”); 

. There is nothing in
the record to indicate that Hurst’s reliable future income at retirement will consist of
anything other than her monthly social security benefit. That benefit amount is
currently less than her necessary monthly expenses, even after adjusting for the
removal of the car payment.




                                               - 16 -
         2.       Reasonable and Necessary Living Expenses

         Due to the delay in bringing the discharge action, the relevant time period for
examination of current income and expenses is evaluated at the time of trial.
Amended Schedules I and J were not submitted to the court for this time period.
Hurst’s testimony indicated that there had been a change in her expenses because
she no longer had a car payment. The addition of these funds to her monthly budget
results in a higher disposable income amount. With that adjustment there is no
dispute that the expenses are both reasonable and necessary.

         3.       Any Other Relevant Facts and Circumstances

         Nothing in the record disputes Hurst’s statements that she attempted to contact
the University regarding her student loan obligation. Eventually, she learned that
she did not qualify for any deferment or forbearance because the loan was in default
and had been accelerated. Exhibits 4 and 5 explain the options available to Hurst.
Rehabilitation of the loan was possible through consecutive monthly payments of an
agreed upon amount for a one year period 25. If she had followed this course of action
and made all of the required payments without a default, Hurst could then apply for
forbearance or deferment on her loan obligation. To qualify for a deferment of up
to three years the borrower must be unemployed. Forbearance, during which interest
continues to accrue, may be granted for economic hardship defined by the poverty
guidelines and whether the debt “is excessive in comparison to income.” The terms
of the loan do not permit the school to cancel the debt or adjust payments due to
hardship. The options that were and are available to Hurst are very different from
the testimony that described the Perkins Loans as being popular with nursing and

25
  Both the bankruptcy court and the majority conclude that $42 is the monthly payment that would be the amount
required to rehabilitate to the loan but neither that amount nor other conditions are clearly ascertained from the
record.
                                                               - 17 -
educational students due to the availability of loan cancelation under certain
circumstances, which do not include an inability to pay.

      The bankruptcy court focused on Hurst’s failure to take the initiative to obtain
a payment accommodation and her failure to make any voluntary payment on the
student loan. Without elaboration, these failures are described as self-imposed
conditions in the majority opinion. Even under the more stringent Brunner test, a
failure to make minimal payments does not preclude a determination of undue
hardship when a debtor’s income has never significantly risen above living expenses.
See Roth v. Educ. Credit Mgmt. Corp. (In re Roth), 

, 918 (B.A.P. 9th
Cir. 2012). Similarly, under the totality of the circumstances test a failure to make
payments or participate in available loan programs does not preclude a determination
of undue hardship. It is simply one factor that can be considered. See 

(citation omitted).

                                   CONCLUSION

      The totality of the circumstances test is not a purely mathematical formula.

Its purpose is to permit all of a debtor’s relevant circumstances to be fully
considered to determine whether repayment of a student loan qualifies as an undue
hardship. Non-pecuniary considerations are equally as important to pecuniary ones
in the analysis. “We will not adopt an interpretation of ‘undue hardship’ that causes
the courts to shut their eyes to factors that may lead to disaster, both personal and
financial, for a suffering debtor.” 

. “Each bankruptcy case
involving a student loan must be examined on the facts and circumstances
surrounding that particular bankruptcy for the Court to make a determination of
‘undue hardship.’” 

(citation omitted). Both the bankruptcy court and the
majority opinion rely on Jesperson in reaching their conclusions. There are a

                                                - 18 -
number of relevant distinguishing factors between the circumstances in that case to
those of Hurst. In Jesperson the debtor’s young age, good health, number of degrees,
marketable skills, and lack of physical impairments all weighed against granting an
undue hardship 

. Each one of these factors, when
considered on the basis of the record here, weighs markedly in favor of granting an
undue hardship discharge in this case.

      A court is not permitted to speculate or make unsupported adjustments to a
debtor’s income, expenses or circumstances in determining undue hardship. These
are the undisputed facts in this case: Hurst moved to Texas after completing her first
year as a student with the intent of returning to school. Due to a series of accidents,
she remained in Texas and did not finish her education. Since 1995 she has
consistently held low paying jobs. Hurst is approaching retirement age, is working
at a minimum wage job, and has significant health difficulties which compromise
her ability to work. If she did successfully complete rehabilitation of the loan, she
would be another year closer to retirement at which time she could request a
forbearance of her payments. Hurst’s current and future income will not result in
substantial repayment on her student loans under any circumstances. At retirement
she will be left with a loan balance and a fixed income consisting only of her monthly
social security benefit.

      Under de novo review and for the reasons stated, I conclude that an undue
hardship exists under the totality of the circumstances test. Accordingly, I would
reverse the bankruptcy court’s order and remand for entry of a judgment discharging
Hurst’s student loan obligation.

                    ____________________________________


                                               - 19 -