February 23, 2024


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Student-Loan Borrower Advocates Sue Biden Over Stalled Debt Relief

Student-Loan Borrower Advocates Sue Biden Over Stalled Debt Relief

  • Student-loan borrower advocates sued the Education Department over stalled relief claims.
  • Former students of Westwood College in Illinois have been waiting over six years for debt relief.
  • Westwood was accused of misrepresenting employment prospects, leaving students worse off.

After a for-profit college accused of predatory behavior shut down, its students were promised student-loan relief. But six years later, they’re still waiting — and now they’re taking legal action.

On Thursday, advocacy groups Student Defense, the Lawyers’ Committee for Civil Rights Under Law, and the National Consumer Law Center sued the Education Department, on behalf of former Westwood College students. Westwood, which shut down in 2015, was later accused by the department of misrepresenting graduates’ employment prospects, and as a result, those students should have qualified for borrower defense to repayment, which gives student-loan relief to those defrauded by for-profit schools.

But many of those students have yet to receive the promised relief, prompting the lawsuit.

“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 statement. “The Department has everything they need to free borrowers from financial limbo and offer them a well-deserved fresh start. It’s beyond time they act on it.”

The Education Department did not immediately respond to Insider’s request for comment.

In 2016, the Illinois Attorney General filed a borrower defense application on behalf of former Westwood students in Illinois in the criminal justice program, and while it resulted in the clearing of institutional loans, which are loans owed by the student to the school, it did not address federal student debt. Earlier this month, Illinois’ Attorney General Kawame Raoul sent a letter to the Education Department following up on the 2016 application.

“There is no more analysis or evidence needed: Westwood defrauded all students who attended its Illinois criminal justice program,” Illinois AG Raoul wrote. “The Department – and only the Department – knows which defrauded borrowers continue to carry federal loan debt for their time at Westwood. These consumers continue to be harmed by the student loan debt they carry and its negative impact on their lives.”

The lawsuit noted the relief the Education Department has already provided to students defrauded by other for-profit schools, like Corinthian College, ITT Tech, and even Marinello Schools of Beauty, which gave relief to borrowers who did not even submit an application. And while the department did approve some relief for former Westwood students in February, the lawsuit cites the failure to act on the Illinois group application as “unlawful,” requiring those students to pay off debt they should not owe once the pandemic payment pause on student loans ends after August 31.

The press release noted that from 2004 to 2015, 44% of Westwood’s students were Black and 21% were Latino, and failure to act on their borrower defense applications “disproportionately denies relief to communities of color who already face heightened levels of debt and economic insecurity.”