Two former students who got stuck with thousands of dollars of debt after being lied to by a for-profit college are suing the Department of Education and their loan servicer. The lawsuit is necessary because Education Secretary Betsy DeVos has put the brakes on the government canceling debt owed by students whose colleges defrauded them.
Yvette Colon went to Sanford-Brown Institute, which paid a $10 million settlement for lying about job placement. Colon racked up $21,000 in loans and earned a certificate as a cardiac sonographer before she found out that it was worthless and her credits wouldn’t transfer. Tina Carr came out of Sanford-Brown with $14,500 in loan debt and, like Colon, credits that wouldn’t transfer. And since the Department of Education won’t provide them relief, they’re citing fraud statutes and contract law:
“People’s rights not to pay for defective products is well established in law, so whatever the Department of Education is or is not doing, the legal rights of borrowers continue to exist and are enforceable against the government just as they are against private parties,” said Toby Merill, a litigator at Harvard University’s Project on Predatory Student Lending, which represents defrauded students. [...]
Abby Shafroth, an attorney at the National Consumer Law Center, said borrowers are turning to the courts because nothing else is working.
“They’ve come to this approach because all other avenues have failed,” Shafroth said. “At a certain point there has to be another way, the department cannot say ‘You have to use our process and not provide a process.’ ”
DeVos has stopped the Obama administration’s practice of providing loan forgiveness to students defrauded by for-profit colleges, and is reportedly considering only partial repayment for the tens of thousands of people who’ve applied for relief since Donald Trump took office and have been kept waiting all these months. That’s why Colon and Carr are suing, and if they succeed, they could open the floodgates for other suits.