Class Action Lawsuit Loan Forgiveness for For-Profit College Students

For-profit college students who have been victims of predatory lending practices may be eligible for loan forgiveness through a class action lawsuit. Many of these students were deceived into taking out high-interest loans to finance their education, only to find themselves buried under a mountain of debt.

A class action lawsuit loan forgiveness program can provide much-needed relief to these students, potentially wiping out thousands of dollars in debt. In some cases, students have been able to have their loans completely forgiven, freeing them from the burden of monthly payments.

The specifics of these programs can vary depending on the circumstances of the case, but one thing is clear: many for-profit college students are eligible for loan forgiveness through the courts.

The lawsuit for student loan forgiveness has been a long and winding road. In 2019, hundreds of thousands of borrowers filed a class lawsuit seeking to discharge their debt.

The case was initially stalled in 2021 when the Trump administration issued 128,000 form-letter denial notices that a federal judge deemed "disturbingly Kafkaesque." This move effectively collapsed the settlement.

However, under President Joe Biden, the Department of Education picked up the case and, in November 2022, U.S. District Judge William Alsup granted approval for a settlement providing 200,000 borrowers with over $6 billion in debt relief.

The settlement was a major breakthrough, but it wasn't without its challenges. Three institutions – American National University, Everglades College, and Lincoln Educational Services – chose to appeal the judgment, arguing that the settlement didn't assess the validity of the borrowers' claims and could harm their reputations.

In February 2023, the federal judge overseeing the case rejected these arguments, noting that relief for the borrowers had already been unfairly delayed for years. The institutions then took their appeal to the 9th Circuit Court of Appeals, where they asked for a stay of the relief pending their appeal.

However, on March 29, the 9th Circuit Court of Appeals refused to suspend the deal while considering the case. This led the institutions to seek relief from the Supreme Court, which ultimately rejected their request for a stay on April 13, 2023.

Here's a timeline of the key events in the lawsuit:

To be eligible for class action lawsuit loan forgiveness, you must have taken out a loan to cover expenses related to a lawsuit, such as medical bills or living expenses.

The loan must have been taken out before the lawsuit was settled or resolved.

You can only receive loan forgiveness if you were a plaintiff in the class action lawsuit.

The amount of loan forgiveness you can receive is typically equal to the amount of the loan you took out.

The loan forgiveness process usually involves contacting the lender and providing documentation of the lawsuit and the loan.

You may be required to provide proof of income or other financial information to qualify for loan forgiveness.

In 2019, a class lawsuit was filed by hundreds of thousands of borrowers seeking to discharge their debt.

The lawsuit was sparked by a significant backlog in the government's handling of applications for relief under the law.

This backlog emerged following the 2015 collapse of Corinthian Colleges, which was exposed after evidence of unlawful recruiting strategies came to light.

As a result, the Department of Education disclosed its intention to forgive $5.8 billion in debt owed by 560,000 borrowers who had attended Corinthian Colleges.

A 2021 settlement collapsed after the Trump administration issued 128k form-letter denial notices, which a federal judge termed “disturbingly Kafkaesque.”

In November 2022, a settlement was approved that provides 200,000 borrowers with more than $6 billion in debt relief.

However, three institutions named in the debt settlement - American National University, Everglades College, and Lincoln Educational Services - chose to appeal the judgment.

Here is a summary of the institutions that appealed the judgment:

The Education Department has granted widespread debt relief for student loan borrowers in various instances involving high-profile for-profit systems.

ED has approved $28.7 billion in debt discharges for nearly 1.6 million borrowers through this process.

Students who attended any Art Institute campus between January 2004 and October 2017 qualify for automatic relief, with the department wiping $6.1 billion in federal student loan debt for 317,000 borrowers.

ED also agreed to discharge $1.5 billion in student loan debt for 79,000 borrowers who attended any Westwood College school between January 1, 2002, and November 17, 2015.

Another $3.9 billion in loan debt was discharged for former ITT Technical Institute students in August, applying to 208,000 students who used those loans to attend ITT between January 1, 2005, and its closure in September 2016.

The department also erased $37 million in debt for University of Phoenix students and $72 million for former Ashford University students.

If you attended a for-profit college and have a borrower defense claim pending, you might be eligible for debt forgiveness. Approximately 200,000 former students from 155 institutions will qualify for automatic debt forgiveness under the settlement.

The institutions affected by the settlement include Robert Fiance Beauty Schools, Robert Fiance Hair Design Institute, Robert Fiance Institute of Florida, Wilfred Academy, Wilfred Academy of Beauty Culture, and Wilfred Academy of Hair & Beauty Culture.

To qualify, you must have attended one of these institutions with a borrower defense claim pending as of June 22, 2022. The department will also review another 64,000 pending claims using standards favorable to borrowers.

Here is a list of the institutions affected by the settlement: