%1

A federal bankruptcy judge ruled that Sacred Heart University can keep roughly $65,000 in tuition money in a legal battle that’s grown more common as the cost of college rises and tuition payments become a popular target of bankruptcy trustees, the Wall Street Journal reported. Bankruptcy Judge Melvin Hoffman ruled that Steven and Lori Palladino benefited from paying their daughter’s tuition at the private Connecticut university. The decision allows the school to avoid returning the money — paid between March 2012 and March 2014 — to a court-appointed trustee who sought the money to pay debts as part of the Massachusetts couple’s 2014 bankruptcy. “A parent can reasonably assume that paying for a child to obtain an undergraduate degree will enhance the financial well-being of the child which in turn will confer an economic benefit on the parent,” Judge Hoffman wrote in the nine-page ruling. With his ruling on Wednesday, Judge Hoffman became the first judge in recent years to weigh in on bankruptcy trustees who sue universities — and sometimes, college students themselves — to take back tuition that had been paid by parents years before. Trustees argue that because bankrupt parents don’t benefit from paying children’s college tuition, those payments should be taken back and made available to pay the parents’ other debts. Most colleges have settled, agreeing to return a total of at least $276,434.80 since 2014, a Wall Street Journal analysis found.