Inaya Mclaughlin
DeVry University, a for-profit college, has been at the centre of several lawsuits and settlements with the Federal Trade Commission (FTC) and the U.S. Department of Education. The allegations against DeVry include misleading students about the university's job and salary outcomes, as well as making deceptive claims related to graduate job placement rates and compensation. As a result of these lawsuits and settlements, some former students have been eligible for loan discharges or refunds. However, the eligibility criteria and processes for obtaining loan discharges or refunds can be complex, and not all loans may be covered. In addition, DeVry has filed a lawsuit against the Education Department to stop it from recouping money from the institution to finance loan discharges for past students. This ongoing legal battle has sparked discussions about the broader implications for student loan discharges and the potential impact on other colleges.
| Characteristics | Values |
|---|---|
| Eligibility for loan discharge | Students who enrolled in a bachelor's or associate's degree program at DeVry University between January 1, 2008, and October 1, 2015, and paid at least $5,000 with cash, loans, or military benefits |
| Loan discharge criteria | Did not receive debt or loan forgiveness as part of the settlement, and completed at least one class credit |
| Eligibility for federal loan discharge | If you already received a refund from the FTC's DeVry settlement fund, you can apply for federal loan discharge from ED |
| Borrower's Defense Against Repayment | If your loans were issued by another institution, you will need to file a Borrower's Defense Against Repayment to get your loans forgiven |
| BDAR Discharge eligibility | If your loans were through the Federal Government, you may be eligible for a BDAR Discharge |
| DeVry's response to loan discharge | DeVry filed a lawsuit against the Education Department to stop them from recouping money to finance loan discharges for past students |
What You'll Learn
Eligibility for loan discharge
The DeVry lawsuit has resulted in varying outcomes for students seeking loan discharge. Here is an overview of the eligibility for loan discharge:
Firstly, it is important to distinguish between the FTC settlement and the subsequent actions of the Department of Education. In 2016, the Federal Trade Commission (FTC) settled with DeVry University for \$100 million over allegations of deceptive advertising regarding graduate job placement rates and compensation. This settlement led to refunds for affected students but did not automatically result in loan forgiveness.
The FTC settlement provided refunds to students who enrolled in a bachelor's or associate's degree program at DeVry University between January 1, 2008, and October 1, 2015, and paid at least \$5,000 with cash, loans, or military benefits. However, this refund did not prevent students from seeking additional relief, such as a borrower defense claim or loan discharge.
Subsequently, in 2017 and 2019, the Department of Education announced the cancellation of \$71.7 million in loans for approximately 1,800 former DeVry students who were deceived by the university's job claims. This action was based on the borrower defense to repayment regulation, which allows debts to be forgiven for students defrauded by their college.
To be eligible for loan discharge under the borrower defense claim, you must demonstrate that DeVry University defrauded or misled you. This could include deceptive statements, false promises, or misleading advertisements about job placement rates and salary outcomes. If you have federal loans or private loans from a bank, you will need to file a Borrower's Defense Against Repayment (BDAR) application. It is important to note that BDAR does not apply to private loans.
While the DeVry lawsuit has provided some relief for students, it is essential to stay informed about the evolving nature of these developments. The eligibility criteria and application processes for loan discharge may vary, and it is advisable to refer to official sources and seek personalized advice for your specific situation.
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Borrower's Defense Discharge
Borrower Defense to Repayment is a federal regulation that allows students who have been defrauded by their colleges, universities, or career schools to seek forgiveness for their federal student loans. The rule was created in 1994 but only came to public awareness in 2015. Since then, the eligibility rules have changed several times.
To be eligible for a Borrower Defense to Repayment loan discharge, you must have a federal direct loan, and your school must have violated a state law or certain federal standards. You also have to show that the school's misconduct caused you harm that warrants a full discharge of your loans. Examples of misconduct include false or misleading statements about employment prospects, the cost of education, or the school's accreditation status.
In the case of DeVry University, a for-profit college, the Federal Trade Commission accused the university of misleading students about job and salary outcomes between 2008 and 2015. DeVry settled with the FTC for $100 million in 2016, and the Education Department cancelled $71.7 million in loans for former DeVry students who made borrower defense claims. DeVry then sued the Education Department to stop it from recouping the money from the institution to finance loan discharges for past students.
If you believe you are eligible for a Borrower Defense to Repayment loan discharge, you can submit an application to the Department of Education. You can create an account on StudentAid.gov to submit, review, and manage your application online, or you can download the form, fill it out, and mail it in. You should include as many details as possible about the misrepresentations the school made to you and provide any supporting documents, such as emails, course catalogs, or advertisements.
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Federal Loan Forgiveness Programs
The DeVry lawsuit does not automatically make you eligible for loan discharge. However, if you took out a loan to attend DeVry University between January 1, 2008, and October 1, 2015, and paid at least $5,000 with cash, loans, or military benefits, you may be eligible for a refund and loan forgiveness. DeVry University, a for-profit college, was accused by the Federal Trade Commission of misleading students about the university's job and salary outcomes, leading to a $100 million settlement in 2016.
In February 2022, the Education Department announced it would cancel $71.7 million in loans for former DeVry students who made borrower defense claims, marking the first time the department granted relief to students whose institution is still open and receiving federal financial aid. The department also stated it would attempt to recoup discharge costs from DeVry. This led to DeVry filing a lawsuit against the Education Department, arguing that the department did not follow proper regulatory procedures and failed to notify the university about borrower defense applications.
If you have loans issued by another institution, such as federal loans or private loans from a bank, you will not be automatically eligible for the FTC's DeVry debt cancellation program. However, you may be eligible for loan forgiveness through the Borrower's Defense Against Repayment (BDAR) program, which offers a complete discharge of all your loans and potential refunds for any payments you have already made.
There are also various Federal Loan Forgiveness Programs available, which you can explore to understand if you meet the eligibility criteria for loan discharge. These programs typically offer income-driven repayment plans or forgiveness for specific professions, such as public service or teaching. It is important to carefully review the requirements and conditions of each program to determine your eligibility.
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The DeVry lawsuit
The lawsuit specifically stems from advertisements that DeVry ran between 2008 and 2015, which the Federal Trade Commission (FTC) accused the university of misleading students about job and salary outcomes. This led to a $100 million settlement with DeVry in 2016. As a result of this settlement, the FTC sent refunds totalling nearly $50 million to approximately 173,000 students who were deceived by DeVry. Additionally, DeVry forgave $50.6 million that students owed directly to the university.
In February 2022, the Education Department announced it would cancel $71.7 million in loans for former DeVry students who had made borrower defence claims. The department then sought to recoup these costs from DeVry, requesting over $23 million to pay for discharged debt on behalf of 649 borrowers. DeVry responded by filing a lawsuit arguing that the Education Department did not follow proper regulatory procedures and failed to provide the university with necessary information regarding student attendance and their allegations.
As a result of the DeVry lawsuit and subsequent settlements, many former students have become eligible for loan discharges and refunds. However, it is important to note that eligibility may depend on specific criteria, such as the type of loan, the period of enrolment, and the details of the individual's situation.
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The Education Department's response
The Education Department has not yet responded to DeVry University's lawsuit. However, the Department's actions and intentions have been outlined in various sources. In February 2022, the Department announced it would cancel $71.7 million in loans for former DeVry students who made borrower defense claims. This decision was based on allegations that DeVry ran misleading advertisements between 2008 and 2015, claiming higher job placement rates and graduate compensation than were accurate.
The Department's decision to grant loan discharges to defrauded students is in line with the borrower defense to repayment regulation. This regulation allows for federal student loan debt to be forgiven if the student's college is found to have engaged in deceptive or fraudulent practices. In this case, DeVry settled with the Federal Trade Commission (FTC) for $100 million in 2016 due to these misleading advertisements.
The Department's intention to recoup the discharge costs from DeVry, amounting to over $23 million, has sparked the recent lawsuit. DeVry contends that the Department did not follow proper regulatory procedures and failed to notify the university about borrower defense applications. They argue that the Department's actions could set a precedent that affects other colleges.
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Frequently asked questions
If you attended DeVry University between 2008 and 2015 and paid at least $5,000 with cash, loans, or military benefits, you may be eligible for loan discharge. The DeVry lawsuit alleged that the university made misleading claims about job and salary outcomes, and as a result, the Federal Trade Commission (FTC) and the Department of Education have taken actions to provide relief to affected students.
To be eligible for loan discharge or other forms of relief, you must meet certain criteria, such as having attended DeVry University during the specified period, paid a certain amount in tuition, and not received debt or loan forgiveness in the past. It's important to review the specific requirements provided by official sources.
If you don't meet the eligibility criteria for the DeVry loan discharge, you may still have other options. You can explore Federal Loan Forgiveness Programs or look into the Borrower's Defense Against Repayment (BDAR) Discharge. The BDAR route is specifically mentioned as an option for those with loans issued by institutions other than DeVry.
To apply for the DeVry loan discharge, you can visit the Borrower Defense page on the official website of the Department of Education. You will need to submit a claim form and provide relevant information about your attendance and any allegations you have against the university.
