Borrower Defense Proposed Class-Action Settlement Agreement
Arlington, VA – Today in a federal court filing, the U.S. Department of Education agreed to settle a class-action case regarding the Department’s ongoing delay in processing borrower defense to repayment claims. The court will need to approve the proposed settlement agreement before it becomes final.
The agreement provides automatic relief, including federal loan discharges, refunds of amounts paid to the Department, and credit repair, for approximately 200,000 students who borrowed to attend one (or more) of a specified list of schools, many of which have closed in recent years. The Department alleges that “attendance at one of these schools justifies presumptive relief, for purposes of this settlement, based on strong indicia regarding substantial misconduct by listed schools, whether credibly alleged or in some instances proven, and the high rate of class members with applications related to the listed schools…” (Emphais added).
“We are deeply concerned that in its haste to respond to outside political pressure, the U.S. Department of Education is attempting to approve wide swaths of claims without regard to individual merit,” said CECU’s President and CEO, Dr. Jason Altmire. “The Department has an obligation to take a more measured approach to determine if each student has been financially harmed based on an unlawful act. The Court should look carefully at the settlement agreement to ensure it is fair for all parties involved.”
About Career Education Colleges and Universities
Career Education Colleges and Universities (CECU) is the national association serving the proprietary higher education sector.