Thomas v. Department of Education (In re Thomas)

In 2012, Vera Thomas (plaintiff) enrolled at a local community college. She took two $3,500 loans from the Department of Education (defendant) to pay for her first two semesters of school. Thomas’s loans went into repayment in December 2013. In 2014, Thomas was diagnosed with diabetic neuropathy, which causes leg and foot pain after long periods of standing. Thomas incurred significant medical expenses and often took unpaid leave from her job at a call center to manage her symptoms. Thomas was fired from the call center in 2016 for violating company policies. Thomas subsequently took jobs at Perfumania, Whataburger, and United Parcel Service (UPS). However, Thomas could not keep those jobs because they required standing. Thomas left UPS in 2017 and did not find a new job. Thomas became unable to make payments toward her loans, and she filed for chapter 7 bankruptcy. Thomas received a general discharge of her debts, but her student-loan debt was not discharged. Thomas brought an adversary proceeding in bankruptcy court against the Department of Education, seeking the discharge of her student-loan debt. Thomas demonstrated that her $194 monthly income was insufficient to meet her $640 monthly expenses. However, she could not show that she was completely incapable of obtaining employment at that time or in the future. The bankruptcy court refused to discharge the debt, and the district court affirmed. Thomas appealed to the United States Court of Appeals for the Fifth Circuit.