WASHINGTON — Another group has filed a lawsuit against the U.S. Department of Education and Education Secretary Betsy DeVos over their reversal of an Obama-era borrower defense rule.
The Public Citizen Litigation Group and the Project on Predatory Student Lending filed the lawsuit in the U.S. District Court for the District of Columbia on Tuesday, June 9, on behalf of six students who took out loans to attend fraudulent institutions.
Corinthians Colleges was a for-profit university system that admitted guilt of systemic fraud following government investigations in 2015.
The Obama administration ruled at the time the over 300,000 students who attended the now-bankrupt Corinthians and took out loans could have their debt erased, as well as refund past payments.
But groups like PPSL allege the DOE has continued to seek repayment from defrauded students. In Oct. 2019, a federal judge threatened DeVos, a Holland native, with potential jail time after the DOE continued to go as far as seizing paychecks and tax returns from defrauded students.
Several lawsuits have been filed against DeVos and the DOE over borrower defense. This latest suit alleges the DOE is only granting partial relief, when defrauded students are entitled to full relief.
“These students were lied to and cheated by predatory schools, and every dollar of federal student loan money was based on those lies. They have a legal right to cancel every dollar of those loans – not a percentage based on a formula cooked up by the Department of Education,” Toby Merrill, director of the Project on Predatory Student Lending said in a statement.
“The Department’s earlier partial relief scheme did not stand up in court, and this version is no better.”
A request for comment was not immediately returned by the DOE.
In Dec. 2019, DeVos testified in front of the House Education Committee. She argued while defrauded students should be “made whole,“ it was an unfair burden on taxpayers to refund students who attended fraudulent universities.
— Contact reporter Arpan Lobo at firstname.lastname@example.org. Follow him on Twitter @arpanlobo.