Student loan reform advocates are suing the Biden-era Education Department (ED) over the slow-moving debt relief process for students who had been defrauded by a defunct for-profit college.
“For nearly six years, across administrations, the Department has shirked its obligations, leaving countless borrowers in the dark about whether or when they’ll receive the relief they’re owed under federal law,” Student Defense Litigation Director Eric Rothschild said in a press release.
“The Department has everything they need to free borrowers from financial limbo and offer them a well-deserved fresh start," Rothschild added. "It’s beyond time they act on it.”
The Lawyers' Committee for Civil Rights Under Law, the National Consumer Law Center, and Student Defense filed a lawsuit against the Department of Education and ED Secretary Miguel Cardona on Thursday. The group filed the suit on behalf of former Westwood College students, who they said had been "waiting six years" for debt relief under the borrower defense to repayment process.
The ED did not respond to a request for comment by the time of publication.
Westwood College students see piecemeal forgiveness
U.S. citizens and eligible non-citizens with federally-backed student debt can apply for borrower defense if their college or career school education misled them "or engaged in other misconduct in violation of certain state laws," according to the ED's Federal Student Aid office.
This kind of cancellation falls under the Borrower Defense Loan Discharge program and is not the type of broad-based forgiveness that President Joe Biden is reportedly considering.
Borrower defense applications surged after the Obama administration cracked down on predatory for-profit colleges in 2015 and created new regulations, but the mechanism for defrauded borrowers seeking debt relief broke down during the Trump administration.
Westwood College, which shuttered in 2015, had made "substantial misrepresentations" about job placement rates, ED's website stated.
In November 2016, the Illinois Attorney General filed a group borrower defense claim on behalf of defrauded students, specifically those who had attended a criminal justice program in Illinois. The AG's efforts ended with the discharge of institutional student loans, but ED has not fully erased the federal student loans students that are owned by the federal agency.
ED has erased the debts of some Westwood students: In February 2022, the department announced that it had approved debt relief claims filed by some Westwood students, as well as former students of DeVry University, ITT Technical Institute, and others, totaling $131 million in cancellation of student debt.