After students testify, judge slaps DeVos for massive rejection of loan relief
On Monday night, a federal judge dismissed a class action settlement brought by former students who say they were scammed by their for-profit colleges and want Betsy DeVos’ Department of Education to stop delaying the action on their requests to cancel their student loan debt. . Judge William Alsup of the U.S. District Court in San Francisco ruled after holding a hearing on Oct. 1, via Zoom, where people could go to court for or against the settlement. In this settlement agreement, DeVos’ department committed to moving forward with the review of student complaints.
After listening to the speakers in the hearing – all former students at for-profit colleges – Judge Alsup apparently concluded that DeVos’ speech was not good enough.
More than 200 former students have requested the opportunity to address the court, and Judge Alsup allowed fourteen to speak at audience. Each speaker described being cheated and mistreated by a for-profit school and finding themselves in a worse position than when they started out, usually without any advancement in career prospects and still in crushing debt. Some also explained that DeVos’ education department had rejected their requests for debt relief, filed under a federal law that provides for loan cancellation when a student can demonstrate an illegal deception of the bank. part of a school, without providing a specific or consistent reason. Others have been waiting for years without a decision from DeVos.
Some 160,000 former students, most of them former students of for-profit universities, have applied for debt relief under the law in recent years.
Yvette Colon, a former student of the now-closed Sanford-Brown Institute in New York, told court: “I went to Sanford Brown in New York because they promised me that I could become a licensed sonographer, and I wanted to help people. It wasn’t until I took out private and federal student loans that I found out the school had lied. They weren’t accredited the right way. I couldn’t even take the licensing exam! The Education Department has known about this fraud for years, as the New York Attorney General investigated and asked the Career Education Corporation to enter into a regulation. But without any explanation, the Department decided that this deception did not matter.
Rachel Greenbaum, who attended the now closed Brooks Institute of Photography, told the judge: “Our requests deserve real and legitimate consideration, not just blanket denial. We should be given every reason so that we can make a factual appeal. We were lied to and stolen indiscriminately with the Ministry of Education seal of approval.
Victoria Linssen, another Brooks alumnus, said that because of the debt accumulated for going to school, “I lost my job, my livelihood, my house, my car, I was without. work for four years, I was forced to move to seven states and travel 1,800 miles. away from my family to find work. Meanwhile, Brooks, she said, “continued to defraud and take in new students until the day they filed for bankruptcy.”
Even for members of the public (like myself) following the hearing via audio-only link, Judge Alsup seemed to take into account every powerful word of the former students’ testimony. He carefully asked each speaker who had not previously covered this information where they came from and how much student debt they had. After years of bloodless legal arguments over the Obama and Trump administration’s regulations and processes regarding for-profit college liability and debt relief, finally, in a federal court of law, Humans told a judge that for-profit colleges scammed them and the education secretary didn’t seem to care.
In his notice On Monday, Judge Alsop made it clear that he was indeed listening. He wrote: “During the class comment period and at the October 1 hearing, the undersigned was struck by the magnitude of the problem here. The consistency and passion with which the 130 or so written commentators, three hundred intervention requests and the fourteen speakers at the fairness hearing have told their stories leads to the conclusion that their voices are not special, special cases. within the class, but representative. of the shared trauma of the classroom. It is not a lawyer-led case. The members of the group have a real interest; they sought an opportunity through higher education to be deceived by for-profit institutions and, at least in some cases, burdened with crushing debt.
Judge Alsup then called Betsy DeVos for summarily dismissing requests for student debt relief: “The secretary’s superficial denial notice does not explain the evidence reviewed or the law applied. It does not provide any analysis. And, the journey of the borrower sounds disturbingly Kafkaesque…. the secretary charged out the door, issuing superficial denial notices totally devoid of meaningful explanation at a breakneck pace…. Form refusal, frankly, puts borrowers to dry up. “
Regarding the testimony of New Yorker Yvette Colon, Alsup asked: “Why did a student who was already entitled to redress for her school’s misconduct under state law not?” -she not now entitled to a remedy on the basis of a claim “which would give rise to a cause of action against the school under applicable state law”, a standard which should have afforded her relief under federal law.
Some of the students had attended now-defunct schools run by notoriously collapsed chains like Corinthian Colleges, Education Management Corporation and ITT Tech. But others have attended schools run by businesses that are still alive and still receiving hundreds of millions of taxpayers to enroll new students. One such company, which previously operated the Sanford-Brown and Brooks schools, and now runs the American Intercontinental University and Colorado Technical Institute, is Perdoceo. It’s the same horrible predatory business, formerly called Career Education Corp., where Betsy DeVos’ top two higher education assistants, Diane Auer Jones and Robert Eitel, previously worked.
Judge Alsup ruled that the case should move quickly to uncovering factual issues, which will allow the student lawyers to take depositions from officials in the DeVos department. The ruling also means that instead of a settlement, the case could end with a ruling by Judge Alsup to force the ministry to act more fairly on student debt relief requests. (Or maybe in January the former head of the Trump University scam will leave the White House, and we’ll have a new President and Secretary of Education who will stop favoring predatory operators over students. and taxpayers.)
Eileen Connor, Legal Director at Harvard Predatory Student Loans Project, and one of the lawyers representing the students, said in a declaration“The group members in this case have suffered prejudice every moment, but in this court order they finally see a change in the trend after years of waiting for justice. Students have come together to speak out and show the court the extent of the trauma they have suffered at the hands of the Department of Education, and the courts are listening. ”
DeVos spokesperson Angela Morabito responded with a declaration again doubting the validity of many student claims: “The mere fact that a claim has been filed does not make it valid and eligible for taxpayer funded relief.”
In addition to the Predatory Student Loans Project, Housing and economic rights defenders represents the students in this important trial.
In addition to arbitrarily dismissing or failing to act on pending student loan relief requests, Trump’s education department under DeVos, Jones, and Eitel has sought to slash the debt relief law with new regulations that make the law unnecessary. Congress sought to overturn the regulations with a bipartisan resolution, but President Trump vetoed the measure. The Predatory Student Loans Project and State Attorneys General each filed separately lawsuits challenge those Trump-DeVos rules.