Lawsuit against DOE loans for trade schools and false promises

Coincidentally the day before the Times published this piece —Suit Seeks Relief for Trade School Students With Years of Debt but No Career – — involving outrageous student loans, I had a conversation with one of my nieces about her outrageous student loan.

Of course, my niece will be going to a legitimate med school but I was stunned at how much money — with endlessly accumulated interest — she would owe just as she began her practice.

I sound naive, I know, and should not be because there have been so many stories about good politicians arguing about this dreadful debt young students labor under. And, of course, there’s the Donald Trump “university” scandal.

But this lawsuit against the federal Department of Education is especially ugly, because the schools offer false promises in order to induce people to take out huge loans to pay for schooling and training they don’t get. In the case of the so-called school mentioned in the article, it has disappeared. But someone pocketed all that money.

Ms. Salazar is one of the four named plaintiffs seeking debt relief and reimbursement from the federal government in a lawsuit filed in Federal District Court in Manhattan on Tuesday.

The suit contends that the government should stop trying to collect on loans that were given to Wilfred students, since it was aware that the company routinely falsified student eligibility for the loans.

I’m thinking this is fraud, i.e., a criminal act, as well as a civil lawsuit on behalf of plaintiffs who were cheated. Is the Department of Justice and/or Attorneys General in the states that harbored these fake schools taking this on? I don’t know enough to answer the question.

The pro bono law group who filed this case wants to make this a class action lawsuit:

“Our best guess is that there were more than 40,000 students who had federally guaranteed loans to attend a school operated by the Wilfred American Education Corporation,” said Jane Greengold Stevens, a lawyer with the New York Legal Assistance Group, which filed the suit. “We believe a very significant proportion were people whose eligibility for the loans was falsely certified.”

If you were similarly screwed, contact Ms. Stevens. She’s looking for other plaintiffs.


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