                             In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 03-1557
IN R E:
  SANDRA ANN CHAMBERS,

                                                    Debtor-Appellee,

APPEAL OF:
 SYLVIA MANNING, not individually,
 but in her capacity as Chancellor of
 the University of Illinois at Chicago.

                          ____________
         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
          No. 02 C 8834—Joan Humphrey Lefkow, Judge.
                          ____________
   ARGUED SEPTEMBER 3, 2003—DECIDED NOVEMBER 4, 2003

                          ____________


  Before RIPPLE, ROVNER and DIANE P. WOOD, Circuit Judges.
  RIPPLE, Circuit Judge. Sandra Ann Chambers filed for
Chapter 7 bankruptcy relief. After receiving a discharge, Ms.
Chambers brought an adversary proceeding against Sylvia
Manning, not individually but in her capacity as Chancellor
at the University of Illinois at Chicago (“UIC”), seeking
declaratory relief that her unpaid student tuition and related
debt was discharged. After a hearing on cross motions for
2                                                     No. 03-1557

summary judgment, the bankruptcy court concluded that
the debt was not excepted from discharge as an educational
loan. See 11 U.S.C. § 523(a)(8). The court therefore granted
summary judgment to Ms. Chambers and declared the debt
discharged. Chancellor Manning appealed the bankruptcy
court’s decision to the district court. That court affirmed the
decision of the bankruptcy court. For the reasons set forth in
the following opinion, we now affirm the judgment of the
district court.


                                 I
                       BACKGROUND
  Ms. Chambers attended UIC from 1993 until May of 1999
to pursue a master’s degree. While at UIC, Ms. Chambers
incurred tuition and related fees under an open student
account. Her final account balance was $1,118.77, plus
                  1
accruing interest. Ms. Chambers failed to pay this amount.
  In October 1999, Ms. Chambers filed a voluntary petition
for Chapter 7 bankruptcy relief. In connection with the
bankruptcy, Ms. Chambers listed UIC as a creditor and
included the account balance on her bankruptcy schedules
as a pre-petition unsecured claim. The Chapter 7 trustee
later designated Ms. Chambers’ bankruptcy a “no asset”
case, and in January 2000, Ms. Chambers received a dis-
charge of her debts. After the discharge, Ms. Chambers was
unable to obtain her transcripts and other papers from UIC.
University officials notified her that UIC considered the
account balance due and owing despite the bankruptcy
discharge.


1
  The account statement from UIC showed charges for an open
balance, tuition, an S-T-S fee, a health services fee, a general fee
and a service fee.
No. 03-1557                                                       3

  In response, Ms. Chambers filed an amended complaint
against Chancellor Manning in her official capacity, in
which she sought declaratory relief that the debt did not
qualify as an educational loan excepted from discharge un-
                2
der § 523(a)(8). Chancellor Manning filed a motion to
dismiss, which the bankruptcy court converted into a mo-
tion for summary judgment. Ms. Chambers filed a cross
motion for summary judgment. After a hearing, the bank-
ruptcy court granted summary judgment to Ms. Chambers.
  The bankruptcy court concluded that the § 523(a)(8) dis-
charge exception did not extend to Ms. Chambers’ account
balance at UIC. Although Chancellor Manning argued that
the debt was the substantive equivalent of a loan, the bank-
ruptcy court noted that the majority of courts to consider
this issue had rejected such an expansive interpretation of
the term “loan.” It noted that the leading case on the issue,
Cazenovia College v. Renshaw (In re Renshaw), 222 F.3d 82, 89-


2
   Ms. Chambers originally filed an adversary complaint against
UIC, in which she sought a hardship discharge pursuant to 11
U.S.C. § 523(a)(8). This complaint was dismissed on 11th Amend-
ment grounds. Ms. Chambers’ current action against Chancellor
Manning in her official capacity requests injunctive relief. She
may therefore proceed under Ex parte Young, 209 U.S. 123 (1908).
See Ameritech Corp. v. McCann, 297 F.3d 582, 587 (7th Cir. 2002)
(noting that the critical issue in determining whether an action for
declaratory judgment falls under Ex parte Young doctrine is
“ ‘whether the declaratory judgment imposes upon the State a
monetary loss resulting from a past breach of a legal duty on the
part of defendant state officials’ ” (quoting Idaho v. Coeur d’Alene
Tribe of Idaho, 521 U.S. 261, 282 (1997))). This case does not
confront the abrogation of sovereign immunity issue addressed
in Hood v. Tennessee Student Assistance Corp. (In re Hood), 319 F.3d
755 (6th Cir.), cert. granted, 2003 WL 21134036 (U.S. Sept. 30,
2003).
4                                                No. 03-1557

90 (2d Cir. 2000), held that an extension of credit should
qualify as a loan under § 523(a)(8) when a contract to trans-
fer money, goods, or services is reached prior to or contempo-
raneous with the transfer. The bankruptcy court found the
Renshaw analysis consistent with Congress’ use of the term
“loan.” Accordingly, applying this standard, the bankruptcy
court found no evidence of intent by either party to enter
into a loan arrangement; rather, the debt arose from Ms.
Chambers’ failure to pay the tuition and expenses when
due.
  The bankruptcy court therefore declared the debt dis-
charged. On appeal, the district court affirmed the bank-
ruptcy court. Chancellor Manning timely appealed to this
court.


                             II
                       DISCUSSION
A. Section 523(a)(8)
  The primary purpose of bankruptcy discharge is to
provide debtors with a fresh start. O’Hearn v. Educ. Credit
Mgmt. Corp. (In re O’Hearn), 339 F.3d 559 (7th Cir. 2003).
Congress has decided, however, that some public policy
considerations override the need to provide the debtor with
a fresh start, and it has excluded certain debts from dis-
charge. Unpaid student loans are among those debts
excluded from discharge. The student loan exception is
codified in the Bankruptcy Code at 11 U.S.C. § 523:
    (a) A discharge under section 727, 1141, 1228(a), 1228(b),
    or 1328(b) of this title does not discharge an individual
    debtor from any debt—
    ***
No. 03-1557                                                 5

    (8) for an educational benefit overpayment or loan
    made, insured or guaranteed by a governmental unit, or
    made under any program funded in whole or in part by
    a governmental unit or nonprofit institution, or for an
    obligation to repay funds received as an educational
    benefit, scholarship or stipend . . . .
11 U.S.C. § 523(a)(8).
  The current version of § 523(a)(8) is significantly broader
than the exception originally enacted. In 1978, Represen-
tative Alan Ertel sponsored the amendment creating the ori-
ginal § 523(a)(8). He stated in debate that “the purpose of
this particular amendment is to keep our student loan
programs intact.” 124 Cong. Rec. H1791 (daily ed. Feb. 1,
1978). Representative Ertel noted that by allowing dis-
chargeability of student loans “we are penalizing students
who are coming along through the system.” Id. at H1792.
Legislators debating the merits of the exception from dis-
charge similarly discussed concerns with the funding of the
student loan program. Id. at H1792-98. As enacted, the
original exception covered debt “to a governmental unit, or
a nonprofit institution of higher education, for an educa-
tional loan” unless the loan became due more than five
years before the date on which the petition was filed. Pub.
L. No. 95-598, § 523(a)(8), 92 Stat. 2549, 2591, 11 U.S.C.
§ 523(a)(8) (1978).
  Despite this original focus on student loan programs,
Congress has consistently expanded § 523(a)(8). The legis-
lative developments are thoroughly explored in Johnson v.
Missouri Baptist College (In re Johnson), 218 B.R. 449, 453-54
(BAP 8th Cir. 1998), and are also discussed in Renshaw, 222
F.3d at 87-88. In brief, Congress has expanded § 523(a)(8) in
the following ways: In 1979, Congress effectively equalized
the treatment of loans administered by for-profit educa-
tional institutions and non-profit educational institutions by
6                                                   No. 03-1557

amending the language of the provision; under the original
version, only loans administered by non-profit educational
institutions were covered. See Bankruptcy Act— Student
Loan Debts, Pub. L. No. 96-56, § 3(1), 93 Stat. 387 (1979).
Also, deferment periods were excluded from the calculation
of the repayment period. See id. § 3(2). In 1984, Congress
amended the language to include educational loans from
“nonprofit institutions” rather than only “nonprofit institu-
tions of higher education.” See Bankruptcy Amendments
and Federal Judgeship Act of 1984, Pub. L. No. 98-353, §
454(a)(2), 98 Stat. 333, 375-76. In 1990, Congress expanded
the exception to cover educational benefit overpayments
and funds received as educational benefits, scholarships, or
stipends, see Federal Debt Collection Procedures Act of 1990,
Pub. L. No. 101-647, § 3621(1), 104 Stat. 4933, 4964-65, and
increased the period of non-dischargeability from five to
seven years, see id. § 3621(2), 104 Stat. at 4965. It also applied
§ 523(a)(8) to Chapter 13 cases. See Student Loan Default
Prevention Initiative Act of 1990, Pub. L. No. 101-508, §
3007(b), 104 Stat. 1388, 1388-28. Thus, although concern for
the federally guaranteed loan programs provided the
original impetus for § 523(a)(8), the exception has consis-
tently expanded to cover other educational debts. With this
legislative history in mind, we turn to the merits of this
appeal.


B. Standard of Review
  Disposition of cross motions for summary judgment is
reviewed de novo. See Hoseman v. Weinschneider, 322 F.3d
468, 473 (7th Cir. 2003); Ozlowski v. Henderson, 237 F.3d 837,
839 (7th Cir. 2001) (citing Hendricks-Robinson v. Excel Corp.,
154 F.3d 685, 692 (7th Cir. 1998)). All facts and inferences are
viewed in the light most favorable to each nonmoving party;
summary judgment is appropriate when the record reveals
No. 03-1557                                                    7

no genuine issue of material fact, and the moving party is
entitled to judgment as a matter of law. See Hoseman, 322
F.3d at 473 (citing Fed. R. Civ. P. 56(c)).


C. Interpretation of § 523(a)(8)
  The question presented by this appeal is whether an
unpaid balance on a student account meets the definition of
an educational loan under § 523(a)(8) and is therefore ex-
cepted from discharge in bankruptcy proceedings. Excep-
tions to discharge “are confined to those plainly expressed
in the Code . . . and are narrowly construed in favor of the
debtor.” DeKalb County Div. of Family & Children Servs. v.
Platter (In re Platter), 140 F.3d 676, 680 (7th Cir. 1998)
(internal citations omitted).
    In interpreting statutory provisions, we begin with the
language of the statute itself. See In re Merchant’s Grain, Inc.,
93 F.3d 1347, 1353 (7th Cir. 1996). Section 523(a)(8) excepts
from discharge any “debt . . . for an educational loan made
. . . by a governmental unit,” but the statute leaves the term
“loan” undefined. We therefore must turn to the traditional
understanding of the term “loan” under common law. See
NLRB v. Amax Coal Co., 453 U.S. 322, 329 (1981) (“Where
Congress uses terms that have accumulated settled meaning
under either equity or the common law, a court must infer,
unless the statute otherwise dictates, that Congress means
to incorporate the established meaning of these terms.”); In
re Clark, 738 F.2d 869, 872 (7th Cir. 1984) (“Absent a persua-
sive reason to the contrary, we are to attribute to the words
of a statute their common meaning.”).
  This court has not previously addressed the scope of the
term “loan” in § 523(a)(8). The Second and Third Circuits,
however, have determined that unpaid student debts like
Ms. Chambers’ do not qualify as educational loans. See
8                                                 No. 03-1557

Boston Univ. v. Mehta (In re Mehta), 310 F.3d 308 (3d Cir.
2002); Renshaw, 222 F.3d at 82. Their analysis is instructive.
  Renshaw involved a consolidated appeal of two separate
cases. In the first case, Cazenovia College v. Renshaw, the
student signed a “Reservation Agreement” with the college
in which the college agreed to hold a place open for the
student, provided he paid amounts due, and agreed not to
charge more for tuition than the amount in effect at registra-
tion. The student agreed to pay a reservation fee, to pay
tuition, room and board for a summer session and an
academic year, and to be bound by other payment-related
provisions. Renshaw, 222 F.3d at 84-85. The student failed to
pay the amounts due, but the college nevertheless allowed
him to register and to attend classes. Id. at 85. The student
later filed for bankruptcy and argued that the amount due
on his account was dischargeable. Id. In the second of the
consolidated cases, The College of Saint Rose v. Regner, a
student regularly paid his tuition until the fall 1993 semes-
ter. Despite the nonpayment, the college permitted him to
attend without having prepaid fully his tuition. Id. After the
college contacted him regarding his “past due balance,” the
student acknowledged the obligation and made payments
but did not pay in full. Id. After the college obtained a
default judgment against him for the amount due, the
student filed for bankruptcy and argued that the debt was
dischargeable. Id.
  The Second Circuit in Renshaw began its analysis with a
discussion of the purpose of 11 U.S.C. § 523(a)(8) and its
legislative history. Id. at 86-88. Next, it noted that Congress
did not define the term “loan,” and so it turned to the com-
mon law definition articulated in In re Grand Union Co., 219
F. 353, 356 (2d Cir. 1914). The court paraphrased the Grand
Union definition as follows:
No. 03-1557                                                   9

    To constitute a loan there must be (i) a contract, where-
    by (ii) one party transfers a defined quantity of money,
    goods, or services, to another, and (iii) the other party
    agrees to pay for the sum or items transferred at a later
    date.
Renshaw, 222 F.3d at 88. The court explained: “This defini-
tion implies that the contract to transfer items in return for
payment later must be reached prior to or contemporaneous
with the transfer. Where such is the intent of the parties, the
transaction will be considered a loan regardless of its form.”
Id. The court also noted, however, that the mere “failure to
pay a bill when due does not create a loan.” Id.
  The court then determined that, in both of the cases
involved in the consolidated appeal, the colleges could
establish nothing more than failure to pay a bill when due.
Neither situation met the definition of a loan because
neither college agreed to extend credit nor agreed to accept
payment at a later date. Id. Rather, both students “unilater-
ally decided not to pay tuition when it came due.” Id. The
court further noted that it could not find a loan “[w]ithout
an agreement by the lender to make a transfer in return for
a future payment,” id. at 89, and that tuition that fell due
“was not thereby transformed into a loan,” id. at 90.
  The Third Circuit adopted this reasoning in Mehta, 310
F.3d at 308. In Mehta, Boston University allowed a student
to register and to take classes in the fall semester, despite a
denial of his federally guaranteed student loan for that se-
mester. Id. at 310. After taking the classes, the student in-
curred delinquent tuition, related costs, and late fees. Id. The
student then filed a voluntary Chapter 7 petition and
argued that the debt to the university was dischargeable. Id.
The court agreed and found no evidence in the record to
allow the court to conclude that the university intended to
loan the student the amount of tuition or that the student
10                                                       No. 03-1557

understood that to be the university’s intent. Id. at 314. The
court concluded that “awareness of an obligation does not
establish that the parties intended a ‘loan,’ ” id. at 315, and
that the university only needed to have the student sign an
agreement evidencing the debt to protect itself, id. at 316.
  We find persuasive the reasoning of the Second and Third
         3
Circuits. Their analysis comports with the statute and with


3
   This court recognizes that prior to Renshaw, courts employed
different analyses when they adjudicated the issue of whether an
unpaid debt qualified as an educational loan. In some cases, the
courts required money to change hands before a loan was
created. See, e.g., United Res. Sys., Inc. v. Meinhart (In re Meinhart),
211 B.R. 750, 754-55 (Bankr. D. Colo. 1997); New Mexico Inst. of
Mining & Tech. v. Coole (In re Coole), 202 B.R. 518, 519 (Bankr.
D.N.M. 1996). In other cases, the courts emphasized the substance
or nature of the transaction. See, e.g., DePasquale v. Boston Univ.
Sch. of Dentistry (In re DePasquale), 225 B.R. 830, 833 (BAP 1st Cir.
1998); Roosevelt Univ. v. Oldham (In re Oldham), 220 B.R. 607, 613
(Bankr. N.D. Ill. 1998); Johnson v. Missouri Baptist Coll. (In re
Johnson), 218 B.R. 449, 455-57 (BAP 8th Cir. 1998). Some courts
required that the student be aware of the debt, that the amount
be certain, and that the debt be a sum of money owed in order to
find that the parties created a loan. See Andrews Univ. v. Merchant
(In re Merchant), 958 F.2d 738, 741 (6th Cir. 1992); Univ. of New
Hampshire v. Hill (In re Hill), 44 B.R. 645, 647 (Bankr. D. Mass.
1984). One bankruptcy court emphasized the intent to create a
loan as evidenced by a promise of payment. See Pelzman v. George
Washington Univ. (In re Pelzman), 233 B.R. 575, 580 (Bankr. D.D.C.
1999).
  The court in Renshaw examined these cases. In several, the court
found support for its position because of facts indicating the
presence of a separate agreement to pay later the debt incurred.
Cazenovia Coll. v. Renshaw (In re Renshaw), 222 F.3d 82, 90-91 (2d
                                                    (continued...)
No. 03-1557                                                      11

the principle that exceptions to discharge are construed
narrowly in favor of the debtor.
   Although the term “loan” can be construed broadly under
                                 4
various dictionary definitions, we look to the common law
definition of “loan” as articulated in In re Grand Union Co.,
219 F. 353, 356 (2d Cir. 1914), and as paraphrased in
Renshaw, 222 F.3d at 88. Under this interpretation, nonpay-
ment of tuition qualifies as a loan “ ‘in two classes of cases’”:
“ ‘where funds have changed hands,’ or where ‘there is an
agreement . . . whereby the college extends credit.’ ” Mehta,
310 F.3d at 314 (quoting Renshaw, 222 F.3d at 90). The
agreement to transfer educational services in return for later
payment “must be reached prior to or contemporaneous
with the transfer” of those educational services. Renshaw,


3
  (...continued)
Cir. 2000) (citing, e.g., Merchant, 958 F.2d at 740-41; DePasquale,
225 B.R. at 833; Oldham, 220 B.R. at 609, 611; Johnson, 218 B.R. at
457; Hill, 44 B.R. at 646-47). The court could not reconcile its
analysis with each case, however. Ultimately, it determined that
those cases that required a transfer of funds provided too
restrictive of a definition. Id. at 91 (citing Meinhart, 211 B.R. at
754-55; Coole, 202 B.R. at 519). It also rejected Pelzman and
Merchant, to the extent those cases were inconsistent, because it
was not clear whether a prior or contemporaneous agreement
separate from the debt existed. Id.
  It is important to note that the case law prior to Renshaw does
not present a single framework for analysis, but is rather an
amalgam of attempts to discern the proper interpretation of the
term “loan.” We find the Renshaw analysis most appropriate, and,
to the extent prior cases are inconsistent with the analysis
adopted here, we respectfully decline to follow them.
4
  See DePasquale, 225 B.R. at 832; Oldham, 220 B.R. at 612; Johnson,
218 B.R. at 456-57.
12                                                   No. 03-1557

222 F.3d at 88. This existence of a separate agreement
acknowledging the transfer and delaying the obligation for
repayment distinguishes a loan from a mere unpaid debt.
  As noted by the bankruptcy and district courts, language
in another provision of § 523(a) reinforces this interpre-
tation. In § 523(a)(2), a provision designed to prevent the
discharge of debts incurred through fraud, Congress ex-
cepted from discharge any “extension of credit.” 11 U.S.C.
§ 523(a)(2). This language is not employed in § 523(a)(8).
The use of the term “loan” in § 523(a)(8) rather than
“extension of credit,” as employed in § 523(a)(2), suggests
that a narrower set of circumstances is contemplated in
§ 523(a)(8) than in § 523(a)(2).
  Furthermore, although Congress has expanded consis-
tently the scope of § 523(a)(8), it has retained the term
“loan.” The retention of the term “loan” suggests that
Congress has delineated purposefully among the types of
educational debts it means to except from discharge.
  Although Congress may someday choose to protect
any educational “extension of credit,” we must conclude
that the term “loan” does not reach so far. Expanding
§ 523(a)(8) to include any “extension of credit” would pro-
tect educational resources, but it would impede the debtor’s
fresh start. Congress, not this court, must grapple with these
                                    5
competing policy considerations.


5
   Cf. Ray v. Univ. of Tulsa (In re Ray), 262 B.R. 544, 551 (Bankr.
N.D. Okla. 2001) (noting that, in the case of unpaid student
tuition, “[t]he policy reasons for holding student loan obligations
nondischargeable are not present”); Seton Hall Univ. v. Van Ess (In
re Van Ess), 186 B.R. 375, 379 (Bankr. D.N.J. 1994) (“There is no
overriding policy that warrants treating [the university] differ-
ently from any other creditor.”).
No. 03-1557                                                 13

D. Ms. Chambers’ Debt
  Having adopted the analysis of the Second and Third
Circuits, we now must determine whether Ms. Chambers’
debt to UIC constitutes a loan.
  Employing the Renshaw framework, we must conclude
that no loan occurred. No funds changed hands, nor is there
evidence of a prior or contemporaneous agreement to pay
tuition at a later date in exchange for an extension of credit.
Rather, Ms. Chambers incurred a debt on an open student
account, attended classes in spite of the debt and failed to
pay her bill. Her situation is indistinguishable from those
involved in Mehta and Renshaw. See Mehta, 310 F.3d at 314
(noting that student “ ‘unilaterally decided not to pay
tuition when it came due’ ” (quoting Renshaw, 222 F.3d at
88)). Chancellor Manning argues that “objective manifesta-
tions”—Ms. Chambers’ awareness of the debt and class
attendance—provide evidence of an agreement by Ms.
Chambers to pay tuition at a later date. These manifesta-
tions are not, however, evidence of a separate agreement
showing intent to create a loan (such as a promissory note,
other written agreement, or oral promise). Rather, these
“manifestations” are the basic incurrence of the debt.
  Because Chancellor Manning has not presented evidence
sufficient to sustain the inference of a loan, summary judg-
ment was appropriately granted. No educational loan with-
in the meaning of § 523(a)(8) existed between UIC and Ms.
Chambers, and the discharge in bankruptcy extinguished
Ms. Chambers’ indebtedness to UIC.
  This decision does not leave educational institutions
without the ability to protect their financial relationships
with their students. Educational institutions may avoid the
situation presented in this case by taking simple precau-
tions. When students fail to pay tuition bills on time, insti-
tutions can withhold educational services until payment, or
14                                               No. 03-1557

they can enter into a separate agreement with the student to
accept later payment. A separate agreement to accept later
payment would create a loan and would be excepted from
discharge under § 523(a)(8). See Mehta, 310 F.3d at 316.


                       Conclusion
  Ms. Chambers’ unpaid student account balance did not
qualify as an educational loan under § 523(a)(8) and there-
fore was discharged in the bankruptcy proceedings. The
bankruptcy court properly granted summary judgment to
Ms. Chambers for this reason, and the judgment of the
district court sustaining that decision is affirmed.
                                                   AFFIRMED
A true Copy:
       Teste:

                          _____________________________
                           Clerk of the United States Court of
                             Appeals for the Seventh Circuit




                   USCA-02-C-0072—11-04-03
