Students Still Paying Loans for Now-Defunct For-Profit College
In October 2018, the Special Litigation Unit filed Quero et al. v. DeVos on behalf of Christopher Quero, Courtney Francis, and Kellin Rodriguez, and other federal student loan borrowers who attended the now-defunct Technical Career Institutes, Inc. (“TCI”), a for-profit college in Manhattan. On September 1, 2017, TCI suddenly shut down, leaving all these students unable to complete their programs of study.
When a school closes, the Department of Education is required by federal law to mail a notice to all the school’s students explaining that they might be eligible to discharge (effectively, cancel) their student loans and giving them the application form they can use to apply for the discharge. When TCI closed, however, the Department did not mail the notice and application form or suspend collection on the TCI loans, which is also required by regulation. NYLAG twice wrote to the Department to demand that the notice and application be sent and collections be suspended, but the Department denied NYLAG’s requests.
Because the Department failed to follow the requirements of the regulation, many TCI students remain unaware of the availability of a closed school discharge and are subject to ongoing collection on their TCI loans, which can harm their credit and impair their ability to obtain student loans in the future.
Mr. Quero, Mr. Francis, and Mr. Rodriguez were not mailed notice of the ability to request discharge their loans or the application form, and were unaware that they might be able to do so until speaking with NYLAG recently. They are now suing Secretary DeVos on behalf of all themselves and other students, asking the court to order Secretary DeVos to send the notice and application form, and suspend collections, as required by federal regulation.
NYLAG Attorneys: Danielle Tarantolo, Jane Greengold Stevens, Jessica Ranucci