Vara v. DeVos

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 was this case filed?

This case was filed in federal court in Massachusetts.

 

When was this case filed?

The Project filed this case on October 22, 2019.

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.

“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

Case Updates

Amanda’s Everest Institute Story | Blog

“A lot of people worked hard, graduated at the top of their class, and were still left in this spot. We were cheated. It destroys your faith in the government and in our system of education and I think it’s important to stand up to that.”

Former MA Corinthian Students Sue Betsy DeVos for Refusing Attorney General’s Application to Cancel Their Loans | Press Release

Corinthian students file lawsuit to force the U.S. Department of Education to follow the law, grant the AG’s group discharge and stop illegal collections on fraudulent student loans

Case Documents

Complaint

Complaint filed in case Vara v DeVos