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Following a student loan class action lawsuit, the Department of Education will begin processing around 170,000 loan forgiveness applications.
The action by the U.S. Department of Education and U.S. Education Secretary Betsy DeVos hinges on a proposed settlement that would resolve claims brought against the education authorities.
Borrowers in the student loan class action lawsuit say that the settlement would be “an enormous relief to know that students will finally have answers on their borrower defense.”
“For years, people have been paralyzed with debt and forced to put their education, personal goals, and financial plans on hold because we didn’t know if or when we might get a decision,” lead plaintiff Theresa Sweet said in a statement.
The Department of Education class action lawsuit claims that loan forgiveness applications were not processed in a timely fashion. The plaintiffs and proposed Class allegedly had “predatory” loans from fraudulent, for-profit colleges.
The Department of Education reportedly failed to process the plaintiffs’ applications – leaving them with uncertainty and financial burdens. The student loans class action lawsuit claimed that “the department’s halt in decision making was influenced by high-level department officials who had relationships to the for-profit colleges implicated by large numbers of borrower defense claims.”
The Department of Education class action lawsuit may be resolved by a recently proposed settlement between DeVos and the plaintiffs. Under the settlement, the department would have 18 months to make final decisions on around 170,000 applications for loan forgiveness. If the settlement is approved by the court, student loan borrowers could see significant relief within 21 months.
The student loans class action lawsuit settlement also includes strict penalties if the Department of Education and DeVos fail to comply with the terms.
For every month that the department fails to meet the settlement agreement’s terms, Class Member student loan debt will reportedly be reduced by 30 percent. If the Department of Education uses involuntary collection methods, Class Member student loans will be reduced by 80 percent.
The settlement will benefit individuals who borrowed student loans through the Department of Education’s Direct Loan or Federal Family Education Loan programs and who are still waiting for their loan forgiveness application to be processed.
The Department of Education notes that the settlement is a good option for student and taxpayers, as it eliminates unnecessary time litigating the issue.
“Rather than have their claims needlessly delayed by unnecessary litigation, students will now have their cases adjudicated promptly,” a Department of Education spokesperson said in a statement.
“The department put a sound adjudication methodology in place and Federal Student Aid has been adjudicating claims. This proposed settlement is validation of that process and of the Department’s longstanding goal to resolve all of these claims as quickly as possible.”
Similarly, class counsel from the Project on Predatory Student Lending at Harvard University’s Legal Service Center has voiced their approval of the settlement. However, the director noted in a statement that the department’s failure to cancel loans in a timely fashion remains “a stain on the federal student loan program.”
“The law is clear – students cheated by for-profit colleges should have their student loans cancelled,” the director said.
DeVos and her department also face a similar Department of Education class action lawsuit from students of Corinthian Colleges.
In this ongoing student loans class action lawsuit, DeVos and the department were found to be in contempt for their “minimal efforts” to comply with a court order halting collections on Corinthian student loan debt. As a result, DeVos and the Department of Education faced a $100,000 fine.
While this case is ongoing, the Project on Predatory Student Lending notes that students may face further difficulties when trying to get their loan debt cancelled, even if they have been defrauded by for-profit colleges.
The difficulties reportedly stem from an August 2019 rule announced by DeVos which implements “near impossible standards” for the loan cancellation process.
Due to these rules, defrauded students may be unable to get their student loans from ITT Technical Institute, Corinthian Colleges, the Art Institutes, Salter College, Brooks Institute of Photography and other for-profit schools cancelled.
Did you file an application for student loan forgiveness? Has your application been processed? Share your experiences in the comment section below.
The plaintiffs are represented by Joe Jaramillo and Natalie Lyons of Housing & Economic Rights Advocates and Eileen M. Connor, Toby R. Merrill, Kyra A. Taylor, and Joshua D. Rovenger of the Legal Services Center of Harvard Law School.
The Department of Education Class Action Lawsuit is Theresa Sweet, et al. v. DeVos, et al., Case No. 3:19-cv-03674, in the U.S. District Court for the Northern District of California.
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700 thoughts onStudent Loan Forgiveness Settlement Will Process 170K Applications
I am overwhelmed by student loan debt & I would like to be added. Graduated 2009 with 60k in loans. Today they’ve reached 80k & I’m not seeing the light at the end of the tunnel no matter how many payments I make. The interest is all I’m paying apparently so yea, I’ll die with debt the way this is going. I’d hate to leave this debt with my family, this is horrible.
In 2006 I was diagnosed with Severe Obstructive Sleep Apnea that led to Right side Heart Failure and Vascular Problems in my legs. I was subsequently pushed out of my permanent job to short term disability, that led to Long term disability and the doctors eventually said it would be permanent disability. Eventually I received documentation to discharge my Student loans and I submitted them, but then was told that they never received them…then they claimed they sent me new documents to fill out, and after the second time they claimed they didn’t get the information back I ceased trying. I have lived under that shadow since 2006…in 2015 after years of living on the border of poverty, I was told by the doctors that my right side heart failure had healed itself. I never got to finish college, because I had simply assumed I was waiting to die. once I found that my heart healed itself, I got up and went back to work. This doesn’t change the fact that I still have issues, but my heart was no longer failing so I started working for myself and parlayed that into other full time work. I and my wife have lived under the financial burden of student loans this entire time while we were on a fixed income and barely making ends meet. now Im 48 and I have to make what i can to potentially retire in the next 20 years…but still have these burdens, with as far as I know – no real recourse.
Please add me.
USDOE is extorting me for having gone to BCTI 30 years ago. BCTI, who has been being investigated by the government as well as sued in court and as such, had to close their schools. I’m being currently exploited for having not held onto paperwork for 30 years. There’s more if you talk with me.
Ill talk with u for sure. I graduated with a certificate in 2000 and I gotten a job as a telemarketer in Tumwater. It was not my dream. I attended that school to reach my career goals and it never happened. So I completed another year at bcti for the computer tech hardware classes in 01. I drove from Chehalis Wa and back every school day as a single mom. Living in HUD apartments. They promised me I would have a high payed career when I left the 2nd time. They pro.ised us that we would be certified techs after completing the A+ exam with the state. That test was $200 and u did not get back your money if u failed. I took that test 3 times and failed 3 times. They test had so much stuff in it that we were not taught in class. They neverr taught us the information needed to pass that test. I had to drive somewhere in Tacoma to take it. My student financial aid report states I received over $6000 in grant money. That is a lie. I never even held that much money in my hands until I got my first big tax return in 2009, that is because the work force hired me to work the 2007 flood relief clean up. That was extremely physically painful.
I believe I cashed 2 $700 checks the first year I attended bcti. Never received any other checks. I owe about $18,000 on my student loans. I never made a payment due to the fact I never obtained a job in the career I dreamed of and worked so hard for. I would get a deferment every year. Then in 2006 I fled and ran across the country from my abuser, my kids father, and never received any notice about the trie allegations made against BCTI. No one ever tried to contact me. They knew all of my information. All my contacts info. I came back to wa in 2015 to find out that they had lost in a class action lawsuit paying back millions to students for their debt relief. These people raised my hopes and dress with their promises. I was 20 years old when they manipulated me out of the workforce office. They knew I was desperate, vulnerable and susceptible into being conned into school to obtain a career of my dreams. I’m trying to find out who was responsible for bcti in Lacey and who is making the payments from their loss of their lawsuit. I want to contact them directly and sue them. I get ignorered about debt relief every time I call my student loan lender MOHELA, and the DOE. I’ve been trying to do something about this since I moved back. I just want to be reimbursed for all the time, energy, the loss of time I could of had with my child or attending a proper school to pursue a career. I want to reimbursed for all of it. For driving 100 miles a day to attend school for 2 years,I want $700 paid back to me for the money lost from taking the A+ state exams and failed. After long ass nights of studying. I want reimbursed for the $1000 computer I bought to do my homework on at home.
I also want them to pay me for the grant money they stole from me. I went through 3-4 different vehicles in those 2 years due to wear and tear and couldn’t afford a great vehicle. It was hell. I have found some info but not exactly what I need to try and get at least my loans forgiven. I can deal with the rest and say I got screwed.
I need to be contacted i have been suffering from bad credit wich has stopped me from living g some were save all because I went to Everest college and one day there doors were locked..no degree,no transferable credits,wasted hours,months at this school just to end up with no degree debt and bad credit
Does anyone know when the 18 month timer started? I’m part of the 170,000 and was present online for the court hearing but cannot remember when that was and when the FSA’s clock started ticking. It’s not mentioned in the article either.
Add me plz
Please add me. I had proven fraud of student loans put on my Dept. Of Education student loan account of approximately $70,000. Student loans deny everything but I have proof!
I am at a loss. I did all the steps two years ago and have yet to hear anything in response. I don’t know where to go to follow up or if they were even serious about the program. My family has suffered tax return garnishments for over 4 years now and my loan balance only goes higher and higher. This is criminal what they have done to the people trying to survive. I will never allow them to get away with this if I have any say in it.
Please add me!
I submitted my Borrower’s Defense application in 2018. It sat for over two years and I believe that it was denied.