Update | A Winning Streak For Student Borrowers
October 31, 2018
Students Won Several Major Victories This Month Against the Department of Education.
After years of delay by the Department of Education, student borrowers represented by the Project on Predatory Student Lending are finally winning their rights in courts. On four separate occasions this month, judges rebuked the Department, struck down illegal policies, and ruled in favor of students.
These recent rulings and decisions demonstrate that student borrowers have, and can enforce, their rights against the Department of Education and predatory for-profit colleges. These wins are a testament to our clients’ perseverance and willingness to stand up to the Department and drive change for student borrowers who attended for-profit colleges across the nation.
In the past three weeks alone, student borrowers won the following cases:
The 2016 Borrower Defense Rule is Now in Effect.
Students thwarted the Department of Education and the for-profit college industry’s attempts to prevent the implementation of the 2016 borrower defense rule. This rule includes a set of important protections for student loan borrowers from predatory schools, including their right to bring their claims in courts instead of in arbitration if their school participates in the federal student loan program. The Department finally backed down from its stubborn delays after all of its arguments were rejected by the court. The judge also rejected an industry attempt to stop the 2016 borrower defense rules from taking effect. As a result, the rule took effect on October 16, 2018 after more than a year of illegal delays.
These victories are a rebuke to both the Department of Education and the for-profit college industry. Students did not stop fighting to get this rule implemented, and now, because of their willingness to fight, these important and long-delayed rules are in effect.
Read more about the borrower defense rulings and the cases Bauer v. DeVos and CAPPS v. DeVos.
The Department Cannot Seize Tax Refunds from Borrower Defense Applicants.
On October 25, 2018, a federal judge ruled that the Department of Education had illegally taken the tax refunds of two former Corinthian College students to pay their student loans, without addressing the assertion, made in borrower defense applications, that their loans are fraudulent and unenforceable. As a result of this ruling, all student loan borrowers are protected from having their income tax credit seized to pay their federal student loans while their borrower defense applications are pending. This win is one step toward stopping the Department’s long-standing and utter disregard for the rights of students who have been subjected to the harmful practices of the predatory for-profit college industry.
Read more about the victory in Williams v. DeVos.
Corinthian Colleges Students Win Class Certification, and Elected Officials Call on the Department to Cancel All Corinthian Debt.
On October 15, a judge certified a class of Corinthian Colleges borrowers, allowing these students to team up to fight for the full loan cancellation they legally are owed. The Project on Predatory Student Lending and Housing and Economic Rights Advocates (HERA) represent the students in the class action lawsuit Calvillo Manriquez v. DeVos.
That same day, a group of elected officials and organizations from across the country called on the Department of Education to cancel the debts of all Corinthian College students once and for all.
Read more about the #CancelCorinthian campaign.