Jet University Flight School Information

The Official Publication of the Jet University Student Alumni Association


Most Bankruptcy Attorneys will advise you that student loans are not eligible for discharge in a Bankruptcy proceeding. 

This is simply not true and I'm going to lay this out for you.  You should not consider this legal advice and not you should not rely on this information.  However you should print this information out and take it to your Bankruptcy Attorney so that he/she can research it for you.  

Also, I am not suggesting that you file Bankruptcy. 

It is expensive to go Bankrupt and I don't believe you should file bankruptcy unless you are getting ready to lose something that you don't want to lose and this is the only way you can save it.  

However, the bankruptcy laws are there for those that have absolutely no way to recover from crushing debts and do allow a fresh start.  You will have this on your credit report for 10 years and you will find that you will have trouble getting reasonably priced loans for cars, homes and other things for a number of years. 

Click this link to see how student loans may be able to be discharged


If you dig down into the bankruptcy law (Section 523(a)(8) you will see it says that student loans can not be discharged.  However there are some requirements that MUST BE MET in for loans not be be able to be discharged. This can be more confusing than the FAR's, but it was probably written by some of the same people. 

One of the following three (3) requirements MUST HAPPEN for a student loan to be NON DISCHARGEABLE:


1.  The loan must have been made under a government guarantee program.

2.  The loan must have been guaranteed by a non-profit organization.

3.  The loan must be a qualified education loan under section 221(d)(2) of the Internal Revenue Code.

If the loan does not meet one of the preceding three (3) requirements then the loan can be discharged.



What this means is that one of the three items must be in place in order for these to be considered non dischargeable in Bankruptcy.  

So let's look at the three requirements as they relate to Jet University:


1.  Jet University Student Loans were not made under a government guarantee program.  So we can eliminate number one.  

2.  Jet University Student Loans are not guaranteed by a non-profit organization.  So we can eliminate number two.

3.  That brings us to number three as the last and only way for the loans to be non-dischargeable.  Number three is a bit more complicated and your attorney will have to dig through several sections of the United States Code to come up with the answer that the loans are not a qualified education loan under section 221(d)(2) of the Internal Revenue Code.

Here is how we came up with this conclusion:


First go to section 221(d)(2) of the Internal Revenue Code.  Here is what it says:


(2) Qualified higher education expenses
The term “qualified higher education expenses” means the cost of attendance (as defined in section 472 of the Higher Education Act of 1965, 20 U.S.C. 1087ll, as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997) at an eligible educational institution, reduced by the sum of—
(A) the amount excluded from gross income under section 127, 135, 529, or 530 by reason of such expenses, and
(B) the amount of any scholarship, allowance, or payment described in section 25A (g)(2).
For purposes of the preceding sentence, the term “eligible educational institution” has the same meaning given such term by section 25A (f)(2), except that such term shall also include an institution conducting an internship or residency program leading to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility which offers postgraduate training.
Since section 221(d)(2) is really a revenue code, it isn't exactly clear what is going on here.  However the highlighted yellow section is what is important to us.  That's the part that talks about an "eligible educational institution".   In order to comply with the requirements and for the loan to be non dischargable then Jet University MUST be an eligible educational institution.  
So now we must look up what qualifies and an "eligible educational institution".  We find the answer to this in section 25A (g)(2) which says:
2) Eligible educational institution
The term “eligible educational institution” means an institution—
(A) which is described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of this section, and
(B) which is eligible to participate in a program under title IV of such Act.
Since Jet University is NOT ELIGIBLE to participate in a program under title IV then Jet University is NOT A QUALIFIED EDUCATIONAL INSTITUTION.  
Because Jet University is NOT A QUALIFIED EDUCATIONAL INSTITUTION then the student loans can not possibly be NON DISCHARGEABLE under the Federal Bankruptcy Laws. 
Therefore the Jet University student loans MUST BE DISCHARGEABLE in a Bankruptcy proceeding.