Williams v. DeVos

Overview

Who is involved in this case?

The Project on Predatory Student Lending represents Darnell Williams and Yessenia Taveras against the Department of Education. Mr. Williams and Ms. Taveras are former students of Everest Institute in Massachusetts, a predatory for-profit college owned by Corinthian College.

 

What is this case about?

In 2016, the Department of Education illegally seized Mr. Williams’s and Ms. Taveras’s federal tax refunds to pay their 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. The Project brought this case to fight for the debt cancellation to which Mr. Williams and Ms. Taveras are entitled.

 

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 14, 2016.

“We were all taught to trust education,” said (Ann) Bowers, former Corinthian student. “But trusting the Education Department put me in a bad situation.” Earlier this year, she said, she confronted department officials she blames for her plight. “I said, ‘I trusted you, and you let us down. You were supposed to be the gatekeeper. You were supposed to protect us. Instead you fed us to the wolves.’

Ann Bowers

Why this case?

Mr. Williams and Ms. Taveras are not the only Corinthian borrowers affected by the government’s refusal to stop seizing money from borrowers it knows were defrauded. In late 2016, Massachusetts Senator Elizabeth Warren released shocking information in a letter to the Secretary of Education, stating that the Department of Education was still seizing tax refunds and other payments to collect the student loans of over 30,000 former Corinthian students, many of whom have applied for discharge. The Project is demanding that the Department of Education abide by the laws created to protected victims of fraud and to stop collecting on unenforceable debts.

Case Outcome

On October 24, 2018, a federal judge ruled that the Department of Education had illegally taken the tax refunds of Mr. Williams and Ms. Taveras without addressing Massachusetts’ Attorney General Maura Healey’s assertion that their loans are fraudulent and therefore unenforceable. The Court directed the Department to consider and rule on group Borrower Defense applications filed by various states attorneys general. This ruling confirms that the Department has an obligation to consider Borrower Defense applications submitted by States on behalf of borrowers. Further, it confirms that it is unlawful for the Department to certify defaulted student loan debts for collection while there is a pending borrower defense application. The Department reached a settlement with Mr. Williams and Ms. Taveras. The Project continues to fight alongside the Attorney General to stop collection on –and cancel- the student loans of all former Everest Massachusetts students.

Case Updates

Update | Judge Declares Department of Education’s Seizure of Corinthian Colleges Borrowers’ Tax Refunds Illegal

A federal judge ruled this week that the Department of Education illegally took the tax refunds of two former Corinthian College students to pay their student loans, without addressing the assertion that these loans are fraudulent and unenforceable. Now, the Department may not take their tax refunds unless and until it makes a reasoned decision…

Update | Lawsuit Against U.S. Departments of Education & Treasury

A former student of Everest Institute filed a lawsuit yesterday in federal court to challenge the government’s continued collection of defaulted federal student loans from low-income people who borrowed in order to attend a school operated by the disgraced and defunct Corinthian Colleges chain. 

Case Documents

Order on Motions for Judgment

On October 24, 2018, the court denied the Secretary's motion for Judgment and vacated the offset for Williams and Taveras.

Reply to Opposition to Motion to Supplement

On January 5, 2018, Plaintiffs filed their reply to Defendant’s Opposition to Motion to Supplement, trying to establish that its opposition had no grounds.

The Department of Education's Opposition to Motion to Supplement

On December 15, 2017, the Department of Education filed an opposition to the motion to supplement.

Coverage

Turning to Courts for Loan Forgiveness | Inside Higher Ed

Earlier this year, Sarah Dieffenbacher closed the book on a two-year legal fight with the U.S. Department of Education over her student loan debt. But the resolution was unsatisfying to Dieffenbacher. Instead of getting a ruling on the loan-forgiveness claim she filed for debt racked up at the former Everest College, the department discharged her loans through bankruptcy court.

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Feds Found Widespread Fraud at Corinthian Colleges. Why are Students Still Paying the Price? | The Washington Post

Nearly 80,000 students of defunct for-profit giant Corinthian Colleges are facing some form of debt collection, even though the U.S. Department of Education unearthed enough evidence of fraud to forgive their student loans, according to an investigation by the staff of Sen. Elizabeth Warren (D-Mass.).

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The U.S. Government Is Collecting Student Loans It Promised to Forgive | Bloomberg

The Obama administration has been actively seeking loan payments from thousands of former students eligible for a debt-forgiveness program.

Read More