The Latest In This Case

In April 2020, a proposed settlement between the student class and the Department of Education was approved by the Court. After the proposed settlement was reached, the Department of Education began issuing blanket denials to borrower defense applications without considering claims found in the applications. After a fairness hearing attended by 500 borrowers via Zoom, the Court struck down the proposed settlement. In doing so, it raised the possibility of an injunction against the Department’s blanket borrower defense denials, and took the unusual step of allowing plaintiffs to take depositions of officials from the Department of Education.

Sweet v. DeVos

Information for Class Members

To learn if you are a member of the class, and to find out more information for class members, click the link below.

Overview

Who Is Involved In This Case?

Named Plaintiffs brought this lawsuit in June 2019 on behalf of themselves and all other former students whose claims for loan cancellation have stalled. Immediately after filing the lawsuit, the students asked the court to let them represent all the students, with a motion for class certification. The motion included more than 900 affidavits from students describing the harm that the Department’s inaction has caused – with 96% saying their lives were worse than before they attended school. In October 2019, the court certified the class of over 200,000 borrowers with pending claims.

What Is This Case About?

Over the past several decades, millions of students borrowed federal student loans to attend various for-profit colleges, including ITT Technical Institute, Corinthian Colleges, the Art Institutes, Salter College, Brooks Institute of Photography, and more. The schools falsely promised students high-paying jobs, state-of-the-art vocational training, and long and fulfilling careers.

Between 2015 and 2019, over 200,000 of these former students have asserted their right under federal law to discharge their federal student loans due to their schools’ misconduct. As it was legally obligated to do, the Department of Education started to adjudicate these borrower defenses, approving nearly 28,000 borrower defenses in the six-month period before January 20, 2017.

Then, under Secretary DeVos, the Department of Education halted all processing of borrower defense claims, refused to adjudicate any borrower defense from any student for well over a year, and ordered the office of Federal Student Aid to stop processing borrower defense applications. As of 2019, more than 200,000 students had a borrower defense pending, many of them have been unresolved for over four years.

The Department of Education’s decision to keep these students in limbo has further destroyed students’ credit and limited their access to federal student aid. For students who have defaulted on their loans, the Department of Education has invoked its extraordinary powers to garnish their wages or seize their tax refunds (for many, their Earned Income Tax Credit).

With this lawsuit, the plaintiffs are demanding that the Department do its job and start adjudicating their borrower defenses immediately.

 

Where Was This Case Filed?

The case was filed in the United States District Court for the Northern District of California in the San Francisco Bay Area.

 

When Was This Case Filed?

This case was filed on Tuesday, June 25, 2019.

 

“This has put my whole life on hold. I can’t sign for home, a car, anything because I don’t know what’s going to happen to this debt. It’s extremely stressful and impacts my whole family. It’s beyond disappointing. The Department of Education did nothing to stop these schools from doing this in the first place and now they are ignoring those of us who were cheated on their watch."

Jessica Jacobson, former NEIA student

"Students defrauded by for-profit colleges should not face financial ruin armed with only a hollow degree blessed by a passive Education Department. If Secretary DeVos believes there’s no urgency in granting these students the relief they are entitled to, then our legal system must fill the void. Every single day that this financial burden rests on students’ shoulders is another day of justice deferred."

Congressman Joe Kennedy III

Why this case?

The law is clear: students who experienced fraud should not be required to pay back federal loans that should never have been made by the Department in the first place. Since Betsy DeVos continues to ignore these students’ legal rights, the only way they can have their voices heard is through the courts.

This lawsuit builds on past legal efforts to hold the Department of Education accountable and stand up for students through court action, which has become one of the only ways for defrauded students to assert their rights. In the case of Williams v. King, students fought back against having their tax refunds stolen by the Department of Education, and won. In the case of Calvillo Manriquez v. DeVos, students preliminarily stopped the Department from limiting the relief it provided to students who it had already decided were entitled to full relief. And in Bauer v. DeVos, a judge forced the Department  of Education to implement the 2016 Borrower Defense rule. In August 2019, Secretary DeVos issued a new borrower defense rule imposing near-impossible standards for student borrowers. in February 2020, the Project challenged the new rule in court. 

Supporting Statements

To read statements in support of our case, click below.

Student Testimony

To read testimony submitted by defrauded former for-profit college students, click below.

Case Updates

Judge Orders That Department of Education Cannot Resume Issuing Borrower Defense Denials Without Notifying Court and Borrowers | Press Release

A federal judge has ordered Education Secretary Betsy DeVos and the U.S Department of Education to notify the court two weeks before it denies any more borrower defense claims from student loan borrowers cheated by their school.

Update | Department of Education Stops Borrower Defense Denials; Reinstates Forbearance

The Department of Education has decided to stop issuing blanket denials of borrower defense to repayment applications, according to a recent filing in Sweet v. DeVos. It also said it was putting all borrowers who received blanket denials back into administrative forbearance. The court recently denied the settlement agreement and ordered the Department of Education…

Students ask Courts to Stop the Department of Education from Denying Borrower Defense Claims | Blog

After a historic hearing last month in which a judge slammed Education Secretary Betsy DeVos’ blanket denials of students’ borrower defense claims and rejected a proposed settlement in our case Sweet v. DeVos, student borrowers are holding the Department of Education accountable in new and important ways.

Case Documents

Order Denying Settlement & For Discovery

The court denied the settlement and ordered discovery on the Department of Education’s explanations of its process for deciding claims, and will consider enjoining the use of the form denial notices.

Joint Motion for Preliminary Settlement Approval

On April 10, 2020, both parties filed a motion for preliminary approval of a settlement agreement.

Order Granting Sweet Class Certification

Order Granting Motion For Class Certification

Coverage

So Deep in Student Debt, They’re Suing Betsy DeVos Over Delays in Loan Forgiveness | CBS News

Alicia Davis feels like she was scammed. As a student at Florida Metropolitan University from 2006 to 2008, she said she was told the cost of her online criminal justice program would be covered by Pell grants and scholarships. She was told her credits could be transferred to other schools. Graduating from the school, a subsidiary of the for-profit Corinthian Colleges, would lead to a job and a decent wage.

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Federal Judge Considers Stopping Rejection of Borrower-Defense Claims | Inside Higher Ed

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In a strongly worded order, a federal judge in California is signaling that he may put a stop to the Education Department’s nearly universal denials of requests by those who have been defrauded by for-profit colleges to have their student debts canceled.

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At the US Education Department, Applications for Loan Forgiveness Languish | CNBC

When Morgan Marler’s 5-year-old daughter, Lilian, asks her why she doesn’t work anymore, Marler doesn’t know what to say. “I can’t explain debt to her,” Marler, 29, said. “And how I went to school and it was all for nothing.” Marler attended ITT Technical Institute, a now-shuttered for-profit school, between 2013 and 2016.

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