“We are calling on the Department to do what is right when it sees evidence of widespread fraud” - Statement on Approval Of Additional Student Borrower Defense Claims

BOSTON (July 9, 2021) – Today, the Department of Education announced that it will approve borrower defense applications for a select 1,800 student borrowers who attended the predatory for-profit colleges of Westwood, Marinello, and the Court Reporting Institute. It will cancel all outstanding loan balances for these individuals, wiping out approximately $55.5 million in predatory student loan debt.

This is the first time the Department of Education has recognized borrower defense to repayment for students who attended for-profit colleges other than ITT Tech, American Career Institute (Massachusetts campuses), and Corinthian Colleges. The Department’s ability to recognize widespread fraud for new categories of borrowers and deliver relief will be instrumental to future borrower defense cases for the hundreds of thousands of clients who are still waiting.

The Project on Predatory Student Lending, along with Housing and Economic Rights Advocates, is court-appointed to represent over 170,000 individuals who have sought to have their federal student loans cancelled under borrower defense, because of predatory and unlawful conduct by the institution they attended. The borrowers impacted by the Department’s announcement today are among the class members in Sweet v Cardona, whose borrower defense applications were illegally stalled by the Department of Education. 

The following is a statement from Eileen Connor, Director of the Project on Predatory Student Lending:

“This is welcome news for 1,800 select borrowers and represents a recognition of the widespread harm done to students who attended fraudulent for-profit colleges across the country. This misconduct was not limited to a few bad actors, and it is encouraging that the Department of Education has taken action in response to evidence of widespread misconduct at schools beyond Corinthian and ITT.

It is a credit to our clients’ perseverance and advocacy that they will finally have their fraudulent debts cancelled after years of waiting; however, there remain hundreds of thousands of additional students who are equally deserving of action. We urge the Biden-Harris administration to move with urgency to cancel the debts of those students. Every day they wait is another day of ruined credit and lives put on hold for debts they never should have had in the first place.

We are calling on the Department to do what is right when it sees evidence of widespread fraud, such as at Westwood, Marinello, and Court Reporting Institute, and not require individuals to jump through hoops to get their fraudulent loans cancelled. Our victory in Vara v. DeVos on behalf of 7,200 Corinthian students in Massachusetts established that attorneys general have the ability to invoke the borrower defense process for an entire cohort or group of affected borrowers, relieving borrowers of the burden to submit paperwork to substantiate what the Department and attorneys general have proved to be true. We are contacted everyday by borrowers who attended schools like ITT, Corinthian Colleges, Westwood, and others, who have no idea that the borrower defense process even exists, or find it difficult to impossible to navigate. Others have concluded that it is a process that exists in name only. The Department has the authority to act more broadly than it has today, and it should, in conjunction with the state attorneys general who were instrumental in uncovering this widespread misconduct.”

 Student statement on the impact of the stalled borrower defense process on applicants who the Department loaned money to attend Westwood:

“The Department’s refusal to grant or deny my borrower defense has made it difficult for me to plan for my financial future because I am unable to save as much as I want for my retirement because I fear my loans will need to be repaid. If that happens, my financial situation will be in ruin because the payments are too much. If my college had prepared me and set me up to succeed in my career field, that wouldn't be an issue, but they did not.

I want to enroll in another educational program, but I cannot because the Department refuses to grant or deny my borrower defense. Specifically, there is no way I could afford to take out any more loans with my current loans held over my head. I would have loved to give college another shot at a credible institution, and maybe that would have happened if the Department approved my application years ago when I submitted it. I feel like that boat has sailed.

[M]y stress, anxiety, and depression have all been at an all-time high. Not knowing what is going to happen, no communication from the Department has made my emotional state worse. My life has been on hold since graduation and I don't like the feeling of being trapped and possibly financially ruined.

[The delay] has also affected my parents, who have Parent PLUS loan borrower defenses that are under review. They are not in a good place financially due to health concerns. Not knowing what will happen to their Parent PLUS loans causes them stress and anxiety as well.

I do not believe that higher education has made my life better.”

--Jeffrey C., attended Westwood College in Chicago, Illinois. Submitted borrower defense application in 2015, has over $120,000 in federal student loans.

 The Project on Predatory Student Lending has represented more than one million former for-profit college students and won landmark cases against the Department of Education and predatory colleges.

Read more client statements on Westwood’s misconduct and predatory behavior here.  

About the Project on Predatory Student Lending

Established in 2012, the Project on Predatory Student Lending represents former students of predatory for-profit colleges. Its mission is to litigate to make it legally and financially impossible for federally-funded predatory schools to cheat students and taxpayers. The Project has brought a wide variety of cases on behalf of former students of for-profit colleges. It has sued the federal Department of Education for its failures to meet its legal obligation to police this industry and stop the perpetration and collection of fraudulent student loan debt.