A recruiter for The Art Institutes, left, greets a job seeker at a National Career Fairs job fair in San Diego.
David Maung | Bloomberg | Getty Images
More than 150,000 former students of for-profit colleges filed a lawsuit against the U.S. Department of Education and Education Secretary Betsy DeVos on Tuesday, claiming the agency is depriving them of the student debt relief to which they’re legally entitled.
The plaintiffs, represented by Harvard Law School’s Project on Predatory Student Lending and Housing & Economic Rights Advocates, accuse the Department of Education under DeVos of failing to implement an Obama-era regulation known as “borrower defense, ” which allows students to have their federal student loans cancelled if their school misled them or engaged in other misconduct.
“The law is clear: Students who experienced fraud should not be required to pay back federal loans that should never have been made by the Department in the first place,” said Toby Merrill, director of Harvard Law School’s Project on Predatory Student Lending.
More from Personal Finance:
These are the ways student loans stop people from buying a house
Student loan nightmare: Some borrowers have to start over
People with massive student debt hope Trump allows bankruptcy
Around 160,000 people have filed claims with the government that their school defrauded them, and new applications continue to pour in. Almost all of these complaints concern for-profit schools, of which there are some 7,000 around the country and which take in around 15% of government financial aid.
However, student loan borrowers have found themselves waiting without answers. The Department of Education hasn’t approved or denied a borrower defense claim since June 2018.
An audit in 2017 by the Department of Education’s Office of Inspector General found that government staff working on borrower defense claims had been instructed not to submit any additional applications for approval.
Education Secretary Betsy DeVos
A federal judge ruled last year that DeVos’ delays of the borrower defense regulation were unlawful. Still, advocates say the agency continues to neglect the applications.
The Department of Education did not immediately respond to a request for comment.
Barmak Nassirian, director of federal relations at the American Association of State Colleges and Universities, says the Department of Education needs to act quickly.
“These folks need relief desperately,” Nassirian said. “Their lives are on hold.”
One of those people in limbo is Brandon Schultz, who decided to finally pursue his dream of becoming a graphic designer in 2008. He enrolled in the online division at the Art Institute, one of the for-profit schools that has produced a slew of borrower defense claims.
“I wanted to get into a field I enjoyed,” Schultz, 38, said. “The Art Institute of Pittsburgh, it sounded fancy. “
He was disappointed to discover how basic the classes were. “It was just a bunch of beginner lessons on how to use these programs,” Schultz said. “I never did any graphic design work.”
He says communication with professors was sparse and his time with the school’s tutors was strictly limited. “I could only talk to a tutor for so long until they cut me off,” he said. “A lot of them couldn’t really speak English.”
I wanted to get into a field I enjoyed,” said Brandon Schultz, 36. “The Art Institute of Pittsburgh – it sounded fancy.”
Source: Brandon Schultz
Schultz went on interviews for graphic design positions, but said he was unprepared for common job tests such employers assign.
Today, he strings together a living through odd jobs, including painting and landscaping, and says there’s no way he can repay the nearly $90,000 he owes for his time at the Art Institute. He makes less than $20,000 a year.
He filed a borrower defense application in 2015. The Department of Education tells him his case is still undecided.
“It’s scary,” Schultz said. “All I can do it wait for the government to give me some type of judgment.”
Are you waiting for an answer on a borrower defense claim? I’d like to hear your story. Please email me at firstname.lastname@example.org.