The federal bankruptcy trustee in Roumeliotis sought to force the University to disgorge tuition payments that the parent-debtors had paid on behalf of their daughter. The trustee claimed that the payments were fraudulent transfers because the parents were insolvent at the time, and because the trustee believed that parents do not receive value when they pay for their adult children’s education. The trustee argued that the tuition should be returned to the debtors’ estate and be available for distribution to the parents’ creditors – even though the University was unaware of the parents’ financial circumstances when it received the payments and had long since provided the educational services to the daughter.

The bankruptcy court granted summary judgment dismissing the claim, finding that the tuition was never part of the parents’ assets. The decision turned, in large part, on the precise nature of the tuition payments at issue. The parents had used federal Direct PLUS Loans to pay the tuition. However, under that program, the proceeds of the loan were paid directly to the University and never held by the parents. Therefore, the loans were never technically the parents’ assets and never were held by the parents. To hold otherwise, the court concluded, would conflict with and undermine the purposes of the Direct PLUS Loan program. The trustee has not taken an appeal.

You can find the Bankruptcy Court decision here.  You can find the amicus brief here.

We continue to await a decision by the First Circuit in another very significant tuition claw-back case, DeGiacomo v. Sacred Heart University (In re Palladino), No. 17-1334 (1^st Cir.). In that case, the Court is expected to rule on the question whether parents received “reasonably equivalent value” for tuition payments they made on behalf of their child. The bankruptcy trustee claims that they did not, because the child and not the parents received the education, and seeks to recover the tuition payments from the University.

© 1998-2018 Wiggin and Dana LLP

This post was written by Aaron Bayer and Benjamin Daniels of Wiggin and Dana LLP.

The post University Wins Important Tuition Claw-Back Case appeared first on The National Law Forum.

On January 7, 2014, the Governor of New Jersey publicly signed the state’s DREAM Act,which provides in-state tuition benefits at public colleges and universities to undocumented graduates of New Jersey high schools. The legislation, which the Governor privately signed last month, emerged from a bipartisan compromise after legislators agreed to remove a provision that would have extended financial aid eligibility to undocumented students. The Governor previously said he would veto the bill if the financial aid provision remained.

Explaining his support for the law, the Governor stated, “Our job I believe as a government is to give every one of these children, who we have already invested hundreds of thousands of dollars in, an opportunity to maximize that investment for their own benefit, for the benefit of their families, and for the benefit of our state and our country.” The Governor also urged students who stand to benefit from the legislation to “make the most of the opportunity,” while a U.S. Senator for New Jersey released a statement describing New Jersey as “a more welcoming and inclusive state for immigrants and their families” due to the new law.

Article by:

Nataliya Binshteyn

Of:

Greenberg Traurig, LLP

The post New Jersey Governor Publicly Signs DREAM Act, Calls Undocumented Students 'An Inspiration' appeared first on The National Law Forum.