{"id":87513,"date":"2017-12-17T11:29:47","date_gmt":"2017-12-17T16:29:47","guid":{"rendered":"http:\/\/madisoncountycourier.com\/?p=87513"},"modified":"2017-12-16T22:11:48","modified_gmt":"2017-12-17T03:11:48","slug":"schneiderman-sues-u-s-education-dept-for-unlawful-collection-activity","status":"publish","type":"post","link":"https:\/\/madisoncountycourier.com\/?p=87513","title":{"rendered":"Schneiderman sues U.S. Education Dep’t for unlawful collection activity"},"content":{"rendered":"

\"\"Multistate Lawsuit Also Alleges that Trump Administration Unlawfully Failed to Act on Loan Discharge Applications Submitted by Defrauded Students; Since July, Unreviewed Claims Ballooned from 65,000 to 95,000<\/em><\/p>\n

Attorney General Eric T. Schneiderman, together with the Attorneys General of Massachusetts and Illinois, filed a lawsuit against the U.S. Department of Education (the \u201cDepartment\u201d) and Secretary Betsy DeVos for unlawfully pursuing collection actions against federal student loan borrowers who were victimized by Corinthian College, Inc. (\u201cCorinthian\u201d). The complaint also alleges that the Department has unlawfully delayed review of the thousands of pending loan discharge applications that have been submitted by defrauded students that were victimized by a variety of for-profit colleges.<\/p>\n

\u201cDespite finding that Corinthian engaged in widespread fraud, the\u00a0Department of Education continues to seize tax refunds and withhold the wages of victims of Corinthian\u2019s fraud,\u201d said\u00a0Attorney General Schneiderman. \u201cThe Department has also failed to act on the thousands of loan discharge applications submitted by defrauded students, leaving many fraud victims with growing interest, ruined credit, and insurmountable debt.\u00a0 The Department of Education is failing to do its job and protect student borrowers \u2013 so we are suing to hold the federal government accountable.\u201d<\/p>\n

Click here to read the complaint.<\/a><\/p>\n

After intense scrutiny by various government entities, Corinthian abruptly ceased operation in 2015. Corinthian owned and operated Everest Institute Rochester in Rochester, New York, as well as online and in-person programs based outside of New York that enrolled New York students. The Department\u2019s own investigation of Corinthian concluded that Corinthian made widespread misrepresentations about post-graduation employment rates for certain programs, including programs that enrolled New York borrowers.<\/p>\n

Federal law provides that federal student loan borrowers may assert a defense to repayment of their loans where a school\u2019s conduct violates state law. This law reflects the common-sense conclusion that defrauded students should not be required to pay for loans when their schools engaged in fraud to induce them to enroll. After the collapse of Corinthian in 2015, the Department received thousands of loan discharge applications. The Department approved discharges for more than 30,000 borrowers. However, after the transition to the Trump Administration, the Department stopped approving pending borrower defense claims.<\/p>\n

The number of total claims awaiting review has ballooned from 65,000 in July to over 95,000 in November. More than 1,600 of these claims are from New York borrowers, including approximately 900 New York borrowers who attended Corinthian. Defaulted borrowers with pending claims are significantly harmed by this delay because interest on the loans continues to accrue, borrowers\u2019 credit reports remain marred, and borrowers\u2019 are often unable to get additional financial aid to return to school.<\/p>\n

In April 2017, Attorney General Schneiderman reached out to Corinthian students who attended certain programs at Corinthian Colleges to\u00a0notify them\u00a0<\/a>about the loan discharge process.<\/p>\n

Attorney General Schneiderman has been active in working to secure relief for victims of predatory for-profit colleges. In June 2017, Attorney General Schneiderman joined 18 attorneys general in demanding that the Department stop delaying loan discharges for defrauded students. In July 2017, Attorney General Schneiderman\u00a0joined a coalition of attorneys general\u00a0<\/a>in filing a lawsuit against the Department for unlawfully delaying the Borrower Defense Rule, which was designed to hold abusive higher education institutions accountable for cheating students and taxpayers out of billions of dollars in federal loans.<\/p>\n

In October 2017, Attorney General Schneiderman\u00a0joined a coalition of attorneys general<\/a>\u00a0in filing a lawsuit against the Department for unlawfully delaying the Gainful Employment Rule, a Rule that is designed to protect students and taxpayers from predatory for-profit schools.<\/p>\n

Attorney General Schneiderman has also obtained restitution and debt relief for victims of predatory for-profit colleges,\u00a0including $2.25 million restitution for DeVry students<\/a>\u00a0who were misled about employment and salary prospects and $2.4 million in loan forgiveness for students that\u00a0took out private loans offered by Aequitas Capital Management<\/a>\u00a0to attend Corinthian Colleges.<\/p>\n","protected":false},"excerpt":{"rendered":"

Multistate Lawsuit Also Alleges that Trump Administration Unlawfully Failed to Act on Loan Discharge Applications Submitted by Defrauded Students; Since July, Unreviewed Claims Ballooned from 65,000 to 95,000 Attorney General Eric T. Schneiderman, together with the Attorneys General of Massachusetts and Illinois, filed a lawsuit against the U.S. Department of Education (the \u201cDepartment\u201d) and Secretary […]<\/p>\n","protected":false},"author":2,"featured_media":70131,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23813,8],"tags":[],"class_list":["post-87513","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-education","category-top-story"],"_links":{"self":[{"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=\/wp\/v2\/posts\/87513","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=87513"}],"version-history":[{"count":0,"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=\/wp\/v2\/posts\/87513\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=\/wp\/v2\/media\/70131"}],"wp:attachment":[{"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=87513"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=87513"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=87513"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}