Vara v. DeVos

Information for Borrowers

To find out more information about this case and how it impacts borrowers with federal student loans from Corinthian Colleges in Massachusetts, click the link below.

Case Outcome

The students won this lawsuit: the judge ordered the Department of Education to cancel the student loans of all 7,200 former Corinthian Colleges students in Massachusetts. This is the first time a federal court has ordered a borrower defense discharge of federal student loans.

The victory came nearly two years after students won the related case Williams v. DeVos, and the judge ordered the Department of Education to stop using tax offset to collect borrowers’ loans that were covered by the Massachusetts Attorney General’s borrower defense application. The ruling is a clear and powerful statement of the rights of student borrowers, and a resounding rejection of the Department of Education’s ongoing and across-the-board refusal to recognize these rights and cancel fraudulent student loans.

 

The Latest

On August 24, 2020, the Department filed a notice of appeal in Vara v. Devos. The Department of Education is appealing the order to discharge all of the Everest Massachusetts borrowers’ loans, despite a strong and clear ruling in favor of borrowers’ right to be done with these bogus debts. While the case is being appealed, the loans will not be enforced – meaning payments need not be made and collections will not occur. While the appeal is pending, loans will not be formally discharged and the Department will not issue refunds on loan amounts already paid.

Overview

Who is involved in this case?

The Project on Predatory Student Lending represents Ms. Vara and approximately 7,200 former Corinthian Colleges students in Massachusetts. against the Department of Education. Ms. Vara is a former students of Everest Institute in Massachusetts, a predatory for-profit college owned by Corinthian College.

 

What is this case about?

The lawsuit demands that the Department of Education grant the Massachusetts Attorney General’s borrower defense application and cancel the students’ fraudulent loans.

The lawsuit comes one year after the Department of Education was ordered to stop collecting on the borrowers’ loans because they were covered by a group borrower defense application that was filed by the Massachusetts Attorney General in 2015.

Not only did the Department of Education ignore the AG's group borrower defense and refuse to cancel these loans, it illegally seized Ms. Vara's federal tax refunds to pay her federal student loans from Everest Institute. Although the government has broad powers to collect defaulted federal student loans, it may not seize funds from borrowers when it knows that the defaulted student loan debts are not legally enforceable due to a school’s fraud.

 

Where and when was this case filed?

This case was filed in federal court in Massachusetts on October 22, 2019.

“We got cheated and are now struggling to repay tens of thousands of dollars of debt for a worthless degree. The Attorney General told the Department of Education four years ago that Everest ripped off students, but they obviously don't care because the Department has still been collecting on my debt and has even garnished my wages and taken my tax refunds. My life only got harder after Everest—the only upside is the strength of the other students I went to school with and that's why I'm standing up with them for what's right.”

- Diana Vara

“Even when presented with irrefutable evidence of fraud and deception by Corinthian, Secretary DeVos continues to side with her allies in the predatory for-profit school industry, rather than follow federal law and provide our students with the relief they need to rebuild their lives. Together with the Project on Predatory Student Lending, we are suing to force the Department to do its job and cancel these loans.” 

- Massachusetts Attorney General Maura Healey

“The evidence of abuse is indisputable. The only possible action to take is complete loan cancellation for all former Corinthian students of Massachusetts. We will work with Attorney General Healey to force Betsy DeVos to follow the law and cancel the debts of 7,200 defrauded Corinthian students who were cheated and continue to suffer under the weight of these fraudulent debts. We thank Attorney General Healey for her commitment to holding Betsy DeVos accountable and for her dedication to standing up for students until these Corinthian loans are cancelled once and for all."

Project on Predatory Student Lending, Toby Merrill

Why This Case?

This case follows the October 2018 ruling in Williams v. DeVos, which acknowledged the Attorney General’s group borrower defense application as valid and laid the groundwork for Attorneys General across the country to apply for loan cancellation on behalf of students in their state who were cheated by predatory for-profit colleges. In the Williams decision, the judge not only found the Attorney General’s application to validly assert a borrower defense on behalf of all individuals who attended Corinthian’s Everest schools in Massachusetts, but also ordered the Department to consider the application, and to stop its aggressive collections by seizing borrowers’ tax refunds while the application was pending.

Case Updates

Borrowers Seek to Hold Secretary DeVos in Contempt of Court for Refusing to Decide Borrower Defense Application | Press Release

Student borrowers filed a motion to hold Secretary of Education Betsy DeVos in contempt of court for failing to comply with an order to decide the borrower defense application filed by the Massachusetts Attorney General on behalf of approximately 7,200 former Corinthian Colleges students in Massachusetts.

Vara v. DeVos: The persistence of students and the power of the law | Blog

Students’ massive win in Vara v. DeVos spanned over 5 years, multiple administrations, two Massachusetts Attorneys General, multiple lawsuits, and dozens of legal filings. It is the result of student borrowers who refuse to give up on their legal rights, and an Education Department that stubbornly refuses to acknowledge them, no matter what the law says.

Judge Orders Secretary DeVos to Completely Cancel Student Loans of all 7,200 Defrauded Corinthian Colleges Students in MA | Press Release

Federal judge orders the Deptartment of Education to cancel the student loans of all 7,200 former Corinthian Colleges students in Massachusetts.

Case Documents

Motion to Enforce Judgment

Plaintiffs seek to hold Secretary of Education Betsy DeVos in contempt for failing to comply with an order to decide their borrower defense application .

Judgment for Plaintiffs

Ruling that the AG's DTR application was a valid borrower defense application for every Corinthian student in Massachusetts, and ordering the Department to discharge their loans.

Complaint

On October 22, 2019, Plaintiffs' filed a Complaint against the Department of Education.

Coverage

DeVos Sued Amid New Evidence About Whether Her Agency Aided For-Profit Operator | U.S. News and World Report

Two student advocacy groups have filed separate lawsuits against Secretary of Education Betsy DeVos, one alleging her Department of Education allowed an operator of for-profit schools to mislead students and sack them with debt they are now unable to repay, and another that accused her of continuing to refuse to discharge the student loan debt of borrowers previously enrolled in for-profit schools that abruptly shuttered.

Read More

Federal Judge Orders Department of Education to Cancel Loans for 7,200 Students | Boston Globe

A federal judge has ordered US Department of Education Secretary Betsy DeVos to cancel the student loan debt of more than 7,200 Massachusetts students who attended Everest Institute, part of Corinthian Colleges’ defunct national chain of for-profit schools, capping a prolonged legal battle.

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Federal Judge Orders DeVos To Cancel Student Loans For 7,200 Defrauded Students | Forbes

Yesterday, a federal judge ordered Education Secretary Betsy DeVos to cancel the student loans for the 7,200 student borrowers in Massachusetts who attended the now-defunct Corinthian Colleges. Massachusetts Attorney General Maura Healey applied for “borrower defense” on behalf of 7,200 former Corinithian College students as a group application. Borrower defense is the provision that helps defrauded students by giving the Secretary of Education the authority to discharge debt when schools lie and cheat their students.

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