DeVos Sued Amid New Evidence About Whether Her Agency Aided For-Profit Operator – By Lauren Camera (US News) / Oct 23 2019
Two lawsuits were filed on the same day House Democrats threatened to subpoena the education secretary.
Two student advocacy groups have filed separate lawsuits against Secretary of Education Betsy DeVos, one alleging her Department of Education allowed an operator of for-profit schools to mislead students and sack them with debt they are now unable to repay, and another that accused her of continuing to refuse to discharge the student loan debt of borrowers previously enrolled in for-profit schools that abruptly shuttered.
The lawsuits were filed Tuesday, the same day House Democrats threatened to subpoena DeVos for obstructing their investigation into the department’s role in allowing the operator of for-profit colleges to mislead students and continue operating the schools despite losing their accreditation.
The lawsuit filed in U.S. District Court for the District of Columbia by National Student Legal Defense Network is directly related to the subpoena issued by House Democrats. It alleges that the Education Department’s actions “caused students at the schools to borrow money and waste months of their lives in pursuit of an education they did not know was unaccredited.”
At issue is the department’s handling of Dream Center Education Holdings, which bought about 100 for-profit schools from Education Management Corporation in 2017, just months before two of the schools lost full accreditation in January 2018.
The accreditor asked Dream Center to notify thousands of students that, as a result of the change in accreditation, it was possible that their credits wouldn’t transfer to other colleges and may not be recognized by future employers. But according to documents released by Rep. Bobby Scott, Democrat of Virginia, Dream Center continued operating the schools and enrolled new students while misrepresenting their accreditation, allowing it to bank millions in federal financial aid dollars. Scott said the documents also show that high-ranking Education Department officials allowed Dream Center to do so.
Scott is also looking into the Education Department’s involvement in a dubious maneuver to convey non-profit status on the schools to facilitate their continued ability to receive federal funds as they sought to restore their accreditation.
As a result, the Defense Network lawsuit argues, the plaintiffs “have incurred debt from the Department that currently requires, or imminently and certainly will require, monthly payments to be made to pay off that debt.”
“The Department’s actions of allowing the schools to participate in the [federal student loan] programs and allowing students to take out loans that they were not eligible for, and then retroactively converting the schools to temporary non-profit status to create the fiction that they were eligible to participate in [the federal student loan program] were unlawful, arbitrary and capricious,” the lawsuit reads.
The organization already represents several groups of students affected by the collapse of Dream Center and its affiliated schools, including students who were enrolled in schools that concealed the fact that they had lost accreditation, students whose federal student aid living stipends were never disbursed and those whose records were destroyed, rendering them unable to transfer their credits.
The Project on Predatory Student Lending, part of the Legal Services Center at Harvard Law School, also filed a lawsuit Tuesday against DeVos on behalf of approximately 7,200 former students enrolled in now-defunct for-profit schools in Massachusetts operated by Corinthian Colleges, demanding department officials cancel their student loans.
DeVos has come under fire for refusing to discharge the student loan debt and process the claims of borrowers who qualified or applied for loan forgiveness under the previous administration’s borrower defense protection on the basis that their schools engaged in deceptive or illegal practices.
The secretary stopped processing those claims in 2017, when she paused the Obama-era borrower defense regulation to rewrite it, arguing that it was too lenient and allowed practically anyone dissatisfied with their education to apply to have their debt forgiven.
Last year, a federal judge ordered DeVos to cease all collections on federal student loans used to attend schools operated by Corinthian Colleges, given they would be eligible for discharge under the borrower defense rule. But the department continued collecting on defaulted borrowers in violation of the court order.
“Everest promised me that they were the place to achieve my goal of bettering myself and helping other people by becoming a medical assistant,” Diana Vara, the named plaintiff in the lawsuit, said in a statement. “But it turned out everything they told us was a lie. We got cheated and are now struggling to repay tens of thousands of dollars of debt for a worthless degree.”
Vara says the department is still collecting on her debt by garnishing her wages and tax refunds.
“My life only got harder after Everest,” she said. “The only upside is the strength of the other students I went to school with and that’s why I’m standing up with them for what’s right.”
The lawsuit, Vara v. DeVos, was filed in federal court in Boston.
“The evidence of abuse is indisputable,” Toby Merrill, director of the Project on Predatory Student Lending, said in a statement. “The only possible action to take is complete loan cancellation for all former Corinthian students of Massachusetts.”
More than 150,000 borrower defense claims are currently pending, many of them from students who attended programs operated by now defunct for-profit chains, like Corinthian and ITT Tech.
Secretary of Education Betsy DeVos is facing two lawsuits over the Department of Education’s handling of for-profit schools.
Jabin Botsford/The Washington Post via Getty Images
