Maldonado v. MOHELA

Represented by the Project on Predatory Student Lending, borrowers allege in a lawsuit against MOHELA that in some cases they’ve been waiting years for the debt relief they were promised.

Tens of thousands of former Corinthian students are still being charged for their loans for the worthless program that scammed them, advocates say, despite Harris and the Department of Education announcing two years ago those debts would be wiped away. The reason appears to be outside of Harris’s control: Advocates blame the loan servicer, who they are now suing.

Yet as the lawsuit filed today claims, when loans actually are being forgiven, MOHELA is inflicting harm rather than suffering it, by failing to process the discharges. “I wish the state of Missouri had to defend MOHELA’s failure to deliver these discharges,” Connor said.

In a statement issued last week, the Project on Predatory Student Lending, which represents students abused by for-profit schools, explained well the private loan dimension to the EDMC scam: “EDMC … partnered with Sallie Mae (now known as Navient), to convince AI borrowers to take out private student loans to augment their federal student loans.”

In a shocking investigation, the U.S. Senate declared the federal student loan program "plagued by fraud and abuse." Its report heaped scorn on for-profit trade schools for serving 22% of federal student loan borrowers but accounting for 44% of defaults. "The school keeps the student aid money ... and the student is left holding the bag with a poor credit rating, no job and no income to repay the student loan.”

Last week the Project on Predatory Lending released an extensive report detailing abuses by the now-closed ITT Technical Institute (ITT Tech). The report details how ITT Tech systematically defrauded millions of students over decades, abused the federal financial aid system and left students weighed down with student loan debt and worthless credentials.

The Education Department said Wednesday that it will cancel the federal student loans of nearly 16,000 people defrauded by DeVry University, ITT Technical Institute and Minnesota School of Business/Globe University.

Roughly 16,000 borrowers who were scammed by their schools will have their federal student loans discharged, resulting in $415 million in relief, the Department of Education announced Wednesday. The borrowers receiving relief attended four for-profit colleges that the agency found misled students in the process of luring them into enrolling and taking on debt to pay for school.

The U.S. Department of Education on Wednesday announced that it had approved $415 million in new student loan forgiveness for borrowers defrauded by their schools. “The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” said U.S. Secretary of Education Miguel Cardona in a statement. “Students count on their colleges to be truthful. Unfortunately, today’s findings show too many instances in which students were misled into loans at institutions or programs that could not deliver what they’d promised.”

Amanda Kulka expected her six-year fight for student loan cancellation would be over by now. Powerful allies, including a state attorney general and a federal judge, agreed that she and other students in Massachusetts had been defrauded by the defunct for-profit chain Corinthian Colleges.

The Education Department announced yesterday that students who were cheated by for-profit institutions and previously granted partial relief on their direct federal loans will now be granted full relief.