BayLegal Files Suit to Force the US Department of Education to Remove Barriers to Predatory Student Loan Debt Relief

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On January 4, 2021, Bay Area Legal Aid, represented by Public Citizen Litigation Group, filed a lawsuit against the U.S. Department of Education under the Freedom of Information Act (FOIA).  The lawsuit seeks to force the Department to disclose information related to the misconduct of the now defunct Corinthian Colleges, Inc.  This information is critical to BayLegal’s efforts to help students harmed by this predatory for-profit institution obtain debt relief.

Under federal law, a student borrower is entitled to a cancellation of their federal student loans if a school misrepresented the student’s ability to benefit from the educational program.  Student borrowers seeking this type of federal student loan cancelation—called a “false certification discharge”—must submit an application to the Department of Education.  The Department regularly asks student borrowers to provide “corroborating evidence” of a school’s misconduct—beyond the borrowers’ own sworn statement—and denies loan cancellation to those who are unable to do so.  One of the few forms of corroborating evidence available is applications submitted to the Department by students who experienced similar misconduct from the same school during the same period.

As part of its work assisting borrowers applying for false certification discharges, BayLegal Aid  submitted a FOIA request to the Department for false certification discharge applications submitted by borrowers who had attended Heald College Milpitas/San Jose, a for-profit college owned by Corinthian Colleges, which collapsed among revelations of widespread fraud and improper conduct. When the Department eventually provided these documents, it redacted critical information—like the name of the program and date of attendance—unrelated to legitimate student privacy concerns but needed to support students’ application for discharge.  “It is unfair for the Department to deny students access to evidence of school misconduct while at the same time refusing them relief because they failed to provide this same evidence in their applications,” said Juliana Fredman, Senior Attorney in BayLegal’s Consumer Unit.  “The Department is putting cheated students in an impossible bind.”

The complaint is available for download here.