                 FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

In the Matter of: CHERYL LEE         
CRAIG,
                          Debtor,
                                            No. 08-15451
CHERYL LEE CRAIG,
              Plaintiff-Appellant,           D.C. No.
                                          06-cv-00466-CKJ
              v.                              OPINION
EDUCATIONAL CREDIT MANAGEMENT
CORPORATION,
             Defendant-Appellee.
                                     
       Appeal from the United States District Court
                for the District of Arizona
       Cindy K. Jorgenson, District Judge, Presiding

                  Argued and Submitted
         June 12, 2009 San Francisco, California

                  Filed August 26, 2009

   Before: Stephen S. Trott, M. Margaret McKeown and
              Sandra S. Ikuta, Circuit Judges.

                 Opinion by Judge Trott




                          11817
11820               IN THE MATTER OF CRAIG


                         COUNSEL

Kasey C. Nye, Quarles & Brady, LLP, Tucson, Arizona, for
the appellant.

Madeleine C. Wanslee, Gust Rosenfeld P.L.C., Phoenix, Ari-
zona, and A.L. Brown, Oakdale, Minnesota, for the appellee.


                          OPINION

TROTT, Judge:

   This case requires us to address the dischargeability of a
student loan in bankruptcy under 11 U.S.C. § 523(a)(8) based
on “undue hardship.”

        FACTS AND PROCEDURAL HISTORY

   Cheryl Lee Craig took out student loans beginning in 1990
to attend Pima Community College and the University of Ari-
zona. She obtained an AA in paralegal studies in 1992, and
a BA in sociology in 1996. In 2003, she consolidated her stu-
dent loans through a consolidation loan with Educational
Credit Management Corporation (“ECMC”). It is this consoli-
dated loan that is at issue in these proceedings.

   Craig obtained various deferments and forbearances on her
student loans, both before and after consolidation. As a result,
                      IN THE MATTER OF CRAIG                     11821
she has never made a payment on the loans. In October 2004,
she petitioned for Chapter 7 bankruptcy relief and initiated
this adversary proceeding against ECMC, seeking to have her
student loan debt discharged under 11 U.S.C. § 523(a)(8)
based on undue hardship. As of April 10, 2005, she owed
$81,575 on the consolidated student loan.

   A one day trial was held on April 25, 2005. At the time of
trial, Craig was forty-seven years old. She worked full-time as
a customer service representative for Anderson Financial Net-
work, Inc. (“AFN”).1 She earned $10 per hour, and typically
worked approximately fifty to sixty-five hours each two week
pay period. AFN also provided Craig with certain benefits,
including health insurance.

   Craig’s employment at AFN was protected under the Fam-
ily Medical Leave Act, which permits Craig to miss up to 400
hours of work per year as a result of doctor certified medical
issues and still keep her full-time employment status. This is
significant because Craig suffers from numerous serious med-
ical problems, including asthma, diabetes, chronic bronchitis,
heart problems (she had a heart attack in 2002), acid reflux,
irritable bowel syndrome, and chronic back problems. These
medical problems require the monthly intervention of, and
monitoring by, several physicians, and a daily regime of pre-
scription drugs. Even with the benefit of health insurance,
Craig’s out-of-pocket medical costs were approximately $350
per month in 2004.

   Craig’s income in 2004 was $16,815. The bankruptcy court
found it unlikely that Craig would be able to materially
change her employment status in the future, and thus used the
$16,815 income figure in determining whether Craig demon-
strated that she would suffer “undue hardship” if required to
repay her student loan.
  1
   She also occasionally worked as a substitute teacher, earning $80 per
day, and as a paralegal.
11822                   IN THE MATTER OF CRAIG
   Craig claimed monthly expenses totaling $1,873, which
included (1) a $150 monthly mortgage payment on Craig’s
mobile home and (2) a $68 monthly contribution to her
employer’s 401(k) plan. These monthly expenses also
included $427 for an automobile payment and miscellaneous
automobile expenses. The bankruptcy court noted that, at the
time of trial, Craig did not own a vehicle but that this was a
temporary condition and that Craig intended to acquire a vehi-
cle and would thus incur automobile expenses.

   After considering the evidence, the bankruptcy court found
a more realistic total monthly expense budget for Craig to be
$1,785. The court reached this budget by adjusting Craig’s
claimed monthly expenses as follows: a $75 reduction for
food; a $75 increase added by the court as a contingency fund
for things such as home repairs, occasional clothing, gifts, and
unforeseeable emergencies; and a $90 reduction in the pay-
ment on an automobile.2 The bankruptcy court recognized,
however, that when Craig obtained a vehicle, her total budget
would exceed her total monthly income by $384.

  The bankruptcy court then found that, other than the $68
monthly 401(k) plan contribution, the items included in
Craig’s $1,785 adjusted monthly budget were reasonably nec-
essary to maintain a minimal standard of living and that Craig
should be required to pay on her student loan debt the $68 per
month that she had been contributing to the 401(k) plan. The
bankruptcy court further found that because Craig’s mobile
home mortgage payment of $150 would end in December
2006, beginning in January 2007, Craig should be required to
pay on her student loan debt the $150 per month that she had
  2
    Subtracting $90 from Craig’s proposed $1,873 budget would result in
an adjusted budget of $1,783 rather than $1,785. Further, a line-by-line
addition of the adjusted budget results in a total adjusted budget of $1,788
rather than $1,785. Because, however, this slight mathematical error does
not affect our decision, we will use the adjusted budget amount of $1,785
used by the bankruptcy and district courts.
                    IN THE MATTER OF CRAIG                 11823
been paying on her mortgage. The bankruptcy court thus
declared Craig’s student loan debt discharged, except that her
debt was not discharged as to: $68 per month from May 1,
2005, forward, plus an additional $150 per month from Janu-
ary 1, 2007, forward.

   Craig requested clarification of the bankruptcy court’s rul-
ing, pointing out that the bankruptcy court had not indicated
what portion of the total student loan debt was discharged; the
number of payments Craig would be required to make; and
whether interest was to continue to accrue and, if so, the por-
tion of the student loan on which interest would accrue. In
response, the bankruptcy court clarified that interest was to
continue to accrue on the entire student loan debt.

   The district court, although unable clearly to rationalize the
bankruptcy court’s analysis, affirmed the bankruptcy court on
the obligation of Craig to pay $68 per month from May 1,
2005, forward, and on the accrual of interest on the entire stu-
dent loan debt, but reversed the bankruptcy court on Craig’s
obligation to pay $150 per month from January 1, 2007, for-
ward. Craig timely appeals. We vacate and remand for recon-
sideration.

                 STANDARD OF REVIEW

   We review de novo the district court’s decision on appeal
from a bankruptcy court. Educ. Credit Mgmt. Corp v. Cole-
man (In re Coleman), 560 F.3d 1000, 1003 (9th Cir. 2009).
We review the bankruptcy court’s findings of fact for clear
error and its conclusions of law de novo. Id. We review its
choice of remedies for an abuse of discretion. Bankr. Receiv-
ables Mgmt. v. Lopez (In re Lopez), 345 F.3d 701, 705 (9th
Cir. 2003).
11824                IN THE MATTER OF CRAIG
                          ANALYSIS

I.   Does the bankruptcy court’s remedy violate 11 U.S.C.
     § 523(a)(8)?

   [1] Under 11 U.S.C. § 523(a)(8), a student loan debt is non-
dischargeable in bankruptcy “unless excepting such debt from
discharge under this paragraph would impose an undue hard-
ship on the debtor and the debtor’s dependents . . . .” 11
U.S.C. § 523(a)(8). Under this provision, a bankruptcy court
may discharge a student loan debt in full or in part. Saxman
v. Educ. Credit Mgmt. Corp. (In re Saxman), 325 F.3d 1168,
1173-74 (9th Cir. 2003). To obtain a discharge, a debtor must
demonstrate that she meets the “undue hardship” requirement
of § 523(a)(8) as to that portion of the debt to be discharged.
Id. at 1174.

   [2] We apply a three-part test, known as the Brunner test,
to determine whether excepting all or part of a student loan
debt from discharge will impose an “undue hardship” under
§ 523(a)(8). See United Student Aid Funds, Inc. v. Pena (In re
Pena), 155 F.3d 1108, 1112 (9th Cir. 1998) (citing Brunner
v. New York State Higher Educ. Servs. Corp., 831 F.2d 395,
396 (2d Cir. 1987)). Under the Brunner test, a debtor must
demonstrate:

     (1) that she cannot maintain, based on current
     income and expenses, a “minimal” standard of living
     for herself and her dependents if forced to repay the
     loans; (2) that additional circumstances exist indicat-
     ing that this state of affairs is likely to persist for a
     significant portion of the repayment period of the
     student loans; and (3) that the debtor has made good
     faith efforts to repay the loans.

Saxman, 325 F.3d at 1173 (citing Pena, 155 F.3d at 1111;
Brunner, 831 F.2d at 396).
                    IN THE MATTER OF CRAIG               11825
   The bankruptcy court found that Craig met all three prongs
of the Brunner test: (1) that (with the exception of the $68
monthly 401(k) contribution), Craig was maintaining her exis-
tence at a minimal standard of living and had no discretionary
income with which to repay her student loan in whole or in
part; (2) that based upon her age, health, current low-paying
employment, and lack of possibilities for improving her
employment status, Craig’s current financial condition was
likely to persist for a significant portion of any repayment
period imposed by the court; and (3) that Craig made a good
faith effort to repay the loan by keeping the lender informed
as to her whereabouts and employment status, and seeking
and obtaining deferments and forbearances such that she was
not in default when she filed her bankruptcy petition. The sec-
ond and third prongs of the Brunner test are not at issue in
this appeal.

  A.   Did the bankruptcy court err by failing to fully dis-
       charge Craig’s student loan debt?

   Craig argues that because she did not have the present abil-
ity on the facts found by the bankruptcy court to make a pay-
ment in any amount on her student loan debt without
experiencing undue hardship, (1) that it was error for the
bankruptcy court to order her to pay $68 a month (plus an
additional $150 a month beginning in January 2007) against
her student loan, and (2) that she was entitled to a full dis-
charge of her student loan debt under § 523(a)(8).

   The bankruptcy court found that, with the exception of the
$68 monthly 401(k) contribution, a budget for Craig of
$1,785 per month was realistic for Craig to maintain a mini-
mal standard of living. Assuming the $68 monthly 401(k)
contribution is not “reasonably necessary” for Craig to main-
tain a minimal standard of living, this simply means that
Craig’s monthly budget should have been reduced by $68 to
determine whether she had discretionary income left over to
pay her student loan. The bankruptcy court did not, however,
11826                 IN THE MATTER OF CRAIG
directly address whether Craig had discretionary income left
over if her budget was reduced by the $68 per month. Instead,
the bankruptcy court simply concluded that because the $68
monthly 401(k) contribution was not necessary for maintain-
ing a minimal standard of living and Craig had been making
such payments, she could afford to pay $68 on her student
loan.

   [3] A review of Craig’s expenses to maintain a minimal
standard of living and her income demonstrates that the bank-
ruptcy court probably erred because—accepting the bank-
ruptcy court’s findings of fact at face value—Craig cannot
afford to pay any amount, let alone $68 a month, on her stu-
dent loan without incurring undue hardship.

   [4] Reducing Craig’s monthly budget of $1,785 by the dis-
puted $68 monthly 401(k) contribution results in an adjusted
monthly budget of $1,717. The bankruptcy court found
Craig’s monthly income to be $1,401. This left Craig with a
monthly deficit of $316 as of the time of trial based on the
bankruptcy court’s own findings of Craig’s income and her
expenses “necessary” to maintain a minimal standard of living.3
Because Craig’s monthly expenses necessary to maintain her-
self at a minimal standard of living exceeded her monthly
income, she may have had no discretionary income with
which to pay her student loan in whole or in part. See Pena,
155 F.3d at 1113 (holding that where debtors’ average
monthly expenses subtracted from their average monthly
income resulted in a monthly deficit of $41, debtors could not
maintain a minimal standard of living and pay off their stu-
dent loans). It thus appears that Craig met her burden on the
first prong of the Brunner test by establishing that she is not
able to maintain a minimal standard of living if she is forced
  3
   This $316 monthly deficit should have been reduced to $166 per month
as of January 2007 because Craig was scheduled to pay off the mortgage
on her mobile home in December 2006 and thus would no longer have a
$150 monthly mortgage payment.
                       IN THE MATTER OF CRAIG                      11827
to repay any portion of her student loan. See id.; Brunner, 831
F.2d at 396.

   We note that the district court was perplexed by the bank-
ruptcy court’s conclusion that Craig could pay $68 per month
even though her necessary expenses were $384 greater than
her income. The district court said, “Craig’s argument is not
without merit, . . .” The court added that “the bankruptcy
court must have erred in finding that the $68 and $150 pay-
ments did not impose an undue hardship if indeed it also
found that the $384 income deficiency necessarily meant that
any payment at all would impose an undue hardship.” The
district court, however, then speculated that the bankruptcy
court must have found that Craig “presumably makes ends
meet with a $384 monthly income deficit.”

   [5] However, we have no way of knowing how the bank-
ruptcy court arrived at its conclusion regarding Craig’s ability
to pay $68 a month towards her student loan debt, and thus,
we have no way of reviewing this issue. Craig appears to have
met her burden of establishing that excepting any portion of
her student loan debt from discharge would impose an “undue
hardship” within the meaning of § 523(a)(8), and that she
might be entitled to a discharge of her entire student loan
debt. Cf. Saxman, 325 F.3d at 1174 (holding that a debtor is
entitled to a discharge of that portion of the student loan that
meets the requirements of § 523(a)(8)). In light of the lack of
clarity in the bankruptcy court’s analysis on this issue, we
vacate and remand to the district court with instructions to
remand to the bankruptcy court for reanalysis and clarification.4
  4
   Our remand for reconsideration of Craig’s ability to pay renders unripe
Craig’s argument that the bankruptcy court’s remedy—which simply
reduced her monthly payments but extended into perpetuity her obligation
to make those payments—is not a partial discharge and exceeded the
bankruptcy court’s authority.
11828                  IN THE MATTER OF CRAIG
  B.    Did the bankruptcy court err in determining Craig’s
        contribution to a 401(k) plan was not an expense nec-
        essary to maintain a minimal standard of living and
        that Craig could thus make monthly payments on her
        student loan in the amount she had been contributing
        to her 401(k)?

   The bankruptcy court determined that Craig’s $68 monthly
contribution to her employer’s 401(k) plan, “[w]hile under-
standable, . . . does not pass muster as a ‘necessary’ expense.”
In making this determination, the bankruptcy court relied on
cases that applied a per se rule that voluntary contributions to
retirement plans are not a reasonably necessary expense.

   [6] Soon after the bankruptcy court issued its decision we
rejected the application of a per se rule that voluntary contri-
butions to retirement plans are never a reasonably necessary
expense. See Hebbring v. U.S. Trustee, 463 F.3d 902 (9th Cir.
2006).5 Under Hebbring, the determination of whether retire-
  5
    Hebbring is a pre-Bankruptcy Abuse Prevention and Consumer Protec-
tion Act (“BAPCPA”) case, see 463 F.3d at 904 n.1, that addresses essen-
tially the same standard at issue here—whether an expense is reasonably
necessary—albeit in a different context. Because Craig’s case was decided
on April 27, 2005, before BAPCPA went into effect on October 17, 2005,
we therefore hold the test in Hebbring for determining whether a volun-
tary 401(k) contribution is a reasonably necessary expense to be viable
and applicable to the pre-BAPCPA determination of whether Craig’s
401(k) contribution is an expense reasonably necessary to maintain a mini-
mal standard of living.
   In Egebjerg v. Anderson (In re Egebjerg), No. 08-55301, 2009 WL
2357706 (9th Cir. 2009), a post-BAPCA case, this circuit held, in the con-
text of determining whether a debtor’s Chapter 7 filing was presumptively
abusive under BAPCPA’s “means test,” 11 U.S.C. § 707(b)(2), that a
debtor’s voluntary contribution to a retirement plan is per se not an
“[o]ther [n]ecessary [e]xpense.” See Egebjerg, 2009 WL 2357706, at *5-
*6. In so holding, the Egebjerg decision noted that the test at issue in
Hebbring—the totality of the circumstances test, which now appears, as
modified by BAPCPA, at 11 U.S.C. § 707(b)(3)—is distinct from the
§ 707(b)(2) “means test,” and that the holding in Hebbring was thus inap-
plicable to the case before it. Id. at *6.
                       IN THE MATTER OF CRAIG                      11829
ment contributions are a “reasonably necessary” expense is to
be made using a “a case-by-case approach.” Id. at 906. Under
this approach, “bankruptcy courts have discretion to deter-
mine whether retirement contributions are a reasonably neces-
sary expense for a particular debtor based on the facts of each
individual case.” Id. at 907.

     In making this fact-intensive determination, courts
     should consider a number of factors, including but
     not limited to: the debtor’s age, income, overall bud-
     get, expected date of retirement, existing retirement
     savings, and amount of contributions; the likelihood
     that stopping contributions will jeopardize the debt-
     or’s fresh start by forcing the debtor to make up lost
     contributions after emerging from bankruptcy; and
     the needs of the debtor’s dependents. Courts must
     allow debtors to seek bankruptcy protection while
     voluntarily saving for retirement if such savings
     appear reasonably necessary for the maintenance or
     support of the debtor or the debtor’s dependents.

Id. (citations omitted).

   [7] Here, because it did not have the benefit of our holding
in Hebbring, the bankruptcy court did not address Craig’s par-
ticular circumstances in determining that the 401(k) contribu-
tions were not necessary, but instead simply applied a per se
rule. Accordingly, on remand, the bankruptcy court will need
to make the fact-intensive determination under Hebbring of
whether Craig’s retirement contributions are a reasonably
necessary expense based on her individual circumstances. See
Hebbring, 463 F.3d at 907.

   Because we are examining a pre-BAPCPA question, namely, whether
Craig’s 401(k) contribution is reasonably necessary to maintain a minimal
standard of living to, in turn, determine whether requiring Craig to repay
her student loan would impose an undue hardship under 11 U.S.C.
§ 528(a)(8), the Egebjerg decision is not applicable to our analysis here.
11830                IN THE MATTER OF CRAIG
II.    Does the remedy set forth by the bankruptcy court violate
       the Thirteenth Amendment of the U.S. Constitution?

   Craig’s final argument is that the bankruptcy court’s rem-
edy imposes an unconstitutional peonage in violation of the
Thirteenth Amendment to the U.S. Constitution because (1)
her expenses exceed her income, and (2) as a result of the
bankruptcy court’s order, she will be making payments on her
student loan into perpetuity while the balance on the student
loan continues to increase, making it impossible for Craig to
ever pay off that loan. We reject this argument as patently
specious.

                        CONCLUSION

   We vacate and remand to the district court with instructions
to remand to the bankruptcy court for a determination of (1)
whether, under Craig’s particular circumstances, the $68
monthly 401(k) contribution is “necessary,” and (2) what por-
tion of Craig’s outstanding student loan debt is subject to dis-
charge based on Craig’s monthly income and her monthly
expenses necessary for maintaining a minimal standard of liv-
ing.

      VACATED and REMANDED.
