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2018: The Year For-Profit College Students Fought Back – And Won

In case after case this year, students represented by the Project on Predatory Student Lending have won hard-fought victories against for-profit colleges and the Department of Education.

for-profit college students

 

2018 marked an important turning point in our legal battles against predatory for-profit colleges and the government policies that fund and enable them. Several times this year, judges struck down illegal policies and ruled in favor of students – affecting hundreds of thousands of former for-profit college students and borrowers and cancelling millions of dollars in fraudulent student loan debt.

These victories demonstrate the power that student borrowers have, and are a testament to their perseverance and willingness to stand up for themselves and others across the nation. It is also a credit to the many dedicated advocates who have worked together for years to challenge illegal policies, support and organize students, and demand meaningful change.

These wins would not have been possible without our dedicated partners and clients, and we look forward to even more in 2019.

 

WIN: ITT Students Secure $1.5 Billion Settlement and $500 Million Loan Cancellation in ITT Bankruptcy.

The year started in with ITT students securing a $1.5 billion claim in the school’s bankruptcy, announced in January. This November, the landmark settlement was approved by the judge, recognizing a $1.5 billion claim for ITT students, cancelling more than $500 million in student debts that were held by the school, and returning $3 million that was paid by students since the company filed for bankruptcy in 2016.

The students are represented by the Project on Predatory Student Lending and our partners at Jenner & Block LLP, who received the 2018 Pro Bono Project of the Year Award from the Turnaround Management Association Chicago/Midwest Chapter for their work on this case.

 

WIN: 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, which includes important protections for student loan borrowers from predatory schools. The Department finally backed down from its stubborn delays after all of its arguments were rejected by the court. As a result, the Borrower Defense rule took effect on October 16, 2018, after more than a year of illegal delays – and directly resulted in the Department’s recent cancellation of $150 million in debt for 15,000 students whose for-profit schools had closed while they attended.

This victory was 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 because of their willingness to fight, these important and long-delayed rules are in effect. Credit is also due to our partners at the Debt Collective, who began mobilizing students around this issue in 2016.

The students in this case were represented by the Project on Predatory Student Lending and our partners at Public Citizen. Read more about the borrower defense rulings and the cases Bauer v. DeVos and CAPPS v. DeVos.

 

WIN: 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. 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 ruling 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.

This win is also a credit to Massachusetts Attorney General Maura Healey, as the ruling confirms that the Department has an obligation to consider borrower defense applications submitted by States on behalf of borrowers. Read more about the victory in Williams v. DeVos.

 

WIN: Corinthian Colleges Students Win Injunction and Class Certification; Elected Officials Call on the Department to Cancel All Corinthian Debt.

In a groundbreaking decision in May, a judged granted our injunction to stop the Department of Education’s illegal partial denial rule, stopping the collection of these fraudulent Corinthian debts. Then, in October, a judge certified a class of Corinthian Colleges borrowers, allowing the students to team up to fight for the full loan cancellation they legally are owed. 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. These partners didn’t just advocate on behalf of students on one day – they do it all year long.

The students in this class action lawsuit, Calvillo Manriquez v. DeVos, were represented by the Project on Predatory Student Lending and our partners at Housing and Economic Rights Advocates (HERA).

 

Looking ahead to 2019, this momentum will only continue, as we fight to put a permanent end to these predatory practices and to cancel every dollar of fraudulent for-profit college debt.