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A federal judge has been asked to increase a $100,000 contempt fine which was ordered against the U.S. Department of Education over failing to comply with an order to cease debt collection from former Corinthian College students.
The former students say new information shows that the department has “never been in compliance” with the court’s order to end the collection of students’ debt, so the $100,000 fine should be increased significantly.
A class action was filed against the Department from former Corinthian College enrollees, who had borrowed federal loans to pay for their schooling. These students have applied to have their loans cancelled due to borrower defense, the motion claims.
During the prior U.S. administration, the Education Department granted these applications in full, according to the motion. After January 2017, the department ceased granting the applications, and then required former students to repay more than 70 percent of their loans, according to the plaintiffs.
In May 2018, the federal court granted the plaintiffs’ preliminary injunction motion and ordered the defendant to stop all efforts to collect the debts from borrowers who had completed an attestation form, the motion states.
“Defendants were directed to halt any action to collect a loan from the Plaintiffs and other students who attended Corinthian programs at specified times, as identified on published lists,” the students’ motion attests. This motion is currently being appealed to the Ninth Circuit Court of Appeals, who has not yet rendered an opinion.
In July 2019, the plaintiffs told the court that the Department was not complying with the preliminary injunction. Afterward, the defendants submitted a compliance report which showed that the Department sent 16,034 demands to students for payment of their loans.
In August 2019, the parties were at odds as to whether a stay put in place by the judge should be lifted or kept in place.
Thereafter, the motion states that 3,298 students made one or more payments toward their loans. In addition, the defendants sent adverse reports to credit agencies related to 847 students. Last, the defendant had subjected 1,808 students to wage garnishment or tax refund offset, the motion states.
In October 2019, the court entered an order which entitled the defendants to pay compensatory sanctions in the amount of $100,000.
In the order, the judge stated: “there is no question that Defendants’ violations harmed individual borrowers who were forced to repay loans either through voluntary actions or involuntary methods (offset from tax refunds and wage garnishment) and who suffered from the adverse credit reporting.”
The motion states that a sanctions fund of $100,000 would award compensation of $1.69 to every student who experienced negative credit reporting, $12.45 to every student who endured involuntary collection, and $4.15 to each student who made voluntary payments.
The plaintiffs are asking for more money because a December compliance report revealed an increase in the number of students who have been affected by the defendants’ noncompliance with the sanctions order, the motion states.
Are you a former student of Corinthian College? Leave a message in the comment section below.
The plaintiffs are represented by Joseph Jaramillo and Natalie Lyons of Housing & Economic Rights Advocates and Eileen M. Connor and Toby R. Merrill of the Legal Services Center of Harvard Law School.
The Corinthian College Student Loan Payment Class Action Lawsuit is Calvillo Manriquez, et al. v. DeVos, et al., Case No. 3:17-cv-07210, in the U.S. District Court for the Northern District of California.
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68 thoughts onStudents Want $100K Contempt Fine Increased For Debt Collection
I am also a former student of of Corinthian who attended to Everest University in Orlando, FL. Please add me.
I’m went to Everest university, I’ve been trying to clear my name and get forgiveness for these fruaded loans.
I am former student of Corinthian College and I just spoke with my loan servicer about any type of loan forgiveness for this school being fraudulent. The fact that that part of my education hasn’t counted towards anything rewarding and now I’m in complete debt. How can I be apart of the law suit against them?
Wow, someone needs to go back to grade school for spelling and grammar, not to college.
I’m a former Corinthian college student who attended Wyo tech college .who fraudulently got students to take out more loans than neccessary ,lied about job placments&carreres.The education department was made to protect students from this types of fraud and all they’ve done is try to collect for fruad they aloud these fraudulent colleges in trap students in to debits and loans that were contracts fruadulantly took out in students names based on fraudulent promisses.we owe neither the department of education nor the colleges for fruaded contracts and lies based on any signed contracts and neither the courts ,nor debit collecting companys who want to collect on false fraudulent contracts should be allowed to collect for any fraudulanlty loans students took out to attend these fake schools&any amounts students have payed toward these fraudulent loans should be paid back to students with interest and any harm brought apone students by credit buerrues reports of this fraud should also be paid punitive damages.the education departments job is to protect student s and if they can do there damn jobs they should be abolished by the federal or state goverment.not keep trying to collect on fraudulent loans they aloud these colleges to keep collecting on knowing the fraud was taking place &continue to entrap students in fruaded phoney contacts&loans.Enough is Enough this has dragged out way to long decades I’ve been trying to clear my name and get forgiveness for these fruaded loans
I am also a former student of of Corinthian and is currently in a garnishment with Department of Education. How can I get added to this class action suit?
I am a former Corinthian College student and. I have a borrower defense application pending that I submitted about 3 years ago.
I am also a former Corinthian student
Please contact me about this. My tax return was taken last year.
Please add me. I attended AIU and graduated in 2009 and have been making payments without much headway. I do have a borrower’s defense app completed and filed. But no word.
Please contact me about this my tax return was taken more than once and i am a former Corinthian student.