Two women who claim they were defrauded by a for-profit college have sued the Education Department and a private loan servicer in a case their attorneys say could provide a new legal remedy for tens of thousands of students frustrated with the department’s inaction on claims seeking loan forgiveness.
The lawsuit, filed Sunday in federal court in New York, comes as the department begins work this week rewriting Obama administration rules designed to boost protections for students defrauded by their schools.
Tina Carr and Yvette Colon had attended Sanford-Brown Institute, a for-profit college in New York, and are seeking to have their student loans erased. Their lawsuit cites federal and state law that prohibits fraud as well as the contract they signed with their school. Previous lawsuits invoked the department’s own regulations in their search for loan relief.
Attorneys for the two students say the new approach is necessary because Education Secretary Betsy DeVos has stalled consideration of tens of thousands of similar claims from borrowers.
Colon completed the school’s certificate program to work as a cardiac sonographer, only to learn that her credentials were invalid and that she couldn’t transfer her credits to other schools, as had been promised, according to the suit. Colon is asking for the cancellation of her four federal and two private loans totaling $21,000.