Villalba v. Navient

Jorge Villalba attended ITT in 2006. Jorge took out over $50,000 in federal student loans and over $43,000 in private student loans to attend ITT, with his mother co-signing some of the private loans. The Villalbas incurred this debt for a bogus education. ITT used deceptive recruiting tactics and lies to get him to enroll and misrepresented employment prospects. In 2017, the government canceled Jorge’s federal student loans as a result of the school’s misconduct through the borrower defense to repayment process.

When presented with evidence of ITT’s fraud and the federal debt cancellation, Navient not only rejected Villalba’s efforts to seek private loan cancellation, it denied that he had any right to seek cancellation of his loan based on ITT’s fraud – even though the right to seek that process is stated in the student loan contract. It also continued to aggressively collect on the Villalbas’ loans.

• September 10, 2020: the case was filed in California state court

• October 21, 2020: the case was submitted to arbitration

• September 7, 2022: the case was dismissed by the arbitrator after settlement

Navient (previously Sallie Mae) has benefitted and profited from the predatory for-profit college system for decades, making subprime private student loans to hundreds of thousands of students like Jorge Villalba and his mother. These private loan companies had mutually beneficial relationships with predatory for-profit schools and were an integral part of a broader system that scammed students and left them in debt they could not repay. For example, for-profit colleges relied on private lenders for their schemes, using them to meet the minimum 10% of revenue required to come from funding outside of federal loans. ITT was one of the most notorious offenders.

In August 2022, The Department of Education finally announced automatic cancellations for former ITT students. However, despite extensive evidence of illegal behavior, private lenders like Navient continue to collect on the student loans that funded ITT’s fraud.These loans are clearly invalid and must be canceled.

Former ITT student Jorge Villalba and his mother, Alicia Villalba, filed this lawsuit against Navient (formerly Sallie Mae), holder of Jorge and Alicia’s private student loan debt from ITT. Jorge and Alicia are represented by the Project on Predatory Student Lending and Jeremy S. Golden, of Golden and Cardona-Loya LLP.

Jorge is also one of the named plaintiffs in the ITT bankruptcy case, which in 2019 helped cancel over $500 million of student debts owed to ITT. You can read about Jorge’s experience at ITT on our blog here.

• This case was filed on September 10, 2020, in Los Angeles at the Stanley Mosk Courthouse.