Student loan proceeds?

[eng2800]

Hi all. New to this forum, and I am going to start calling bankruptcy attorneys this week for consults.

I have tons of q's, but the one I am thinking about now is:

I am unemployed, and I will be returning to college this summer. I have applied for student loans. After the tuition is deducted, the college will cut me a check for the difference. The balance is intended for transportation, living expenses, etc.

CAN THIS MONEY BE LOOKED UPON AS AN ASSET AND THEREFORE BE SUBJECT TO SEIZURE BY THE BANKRUPTCY TRUSTEE, OR IS PROTECTED BECAUSE IT REPRESENTS THE PROCEEDS OF A FEDERAL STUDENT LOAN?

Thanks...

[HHM]

Acutally, that is a good question. My guess is, that student loan proceeds are exempt, but I cannot site you a specific statute.

Yes, technically it is an asset, but likely an exempt asset.

[EdytaHome]

During school, I always took out the max on my student loans plus federal aid (big mistake!!!). None of this money was ever reported as income, which makes me think that the trustee can't touch it. Honestly, I don't belive there is a section in your bk petition which states how much your school costs are and how much money you need to pay for it. So if you have extra, you should be able to keep that money.
Caution! Don't take out any more than you need.