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NYLAG sues Secretary of Education for Failing to Notify Former Wilfred Students

Salazar v. DeVos

Wilfred American Education Corporation (Wilfred) was a national chain of for-profit trade schools that engaged in widespread fraud and went out of business in the early 1990s. Wilfred Schools were the subject of several federal investigations in the 1980s and 1990s, and the people who ran it were subsequently convicted of federal financial aid fraud. When a school has falsely certified that a particular student is eligible for student loans, students can quality for a “false certification discharge” that forgives and reimburses student loans disbursed after January 1, 1986. The false certification discharge includes what is known as the ability-to-benefit (ATB) discharge for students who did not have a high school diploma or G.E.D. and were not given or did not pass an approved ATB test, but were still certified by a school as eligible for federal student loans. Wilfred falsely certified thousands of students as being eligible for financial aid when they did not have a high school diploma or G.E.D., and did not pass an appropriate test.

In February 2014, NYLAG sued the US Department of Education (USED) because USED violated federal law by refusing to notify former Wilfred students that they may be eligible to seek discharge of their loans if Wilfred falsely certified them to take out those loans. In August 2017, the Court approved a settlement between USED and the thousands of former students, which required USED to notify these students that they may be able to get their loans canceled, bringing the possibility of millions of dollars of financial relief for the students. USED has estimated that over 61,300 federally guaranteed student loans were made to Wilfred School attendees. USED has also estimated that 60% of these borrowers were falsely certified by Wilfred as having the ability to benefit from Wilfred’s program, and should therefore be eligible to have their loans discharged.

If you attended Wilfred Academy, American Business Institute, or Washington School of Secretaries and obtained a federally guaranteed student loan, in whole or in part after January 1, 1986, you may be eligible to discharge (cancel) your federal student loans. 

If this describes you, please read answers to frequently asked questions NYLAG receives from former students.

[En Español] Si asistió a Wilfred Academy, American Business Institute o Washington School of Secretaries y obtuvo un préstamo estudiantil con garantía federal, en o después del 1 de Enero de 1986, puede ser elegible para cancelar sus préstamos estudiantiles federales.

Si esto lo describe, lea las respuestas a las preguntas frecuentes que NYLAG recibe de ex alumnos.

Frequently Asked Questions

Frequently Asked Questions:

1. Can I get my loan canceled?

You can probably get your loan canceled if:

a) You did not have a high school diploma or a G.E.D. when you enrolled at a Wilfred School (called Wilfred Beauty Academy, Washington School of Secretaries, or American Business Institute);

b) The school did not give you a test of your “ability to benefit” from the school’s program, or gave a test that was not approved by the U.S. Department of Education (“USED”), or did not properly administer or grade the test;

c) All or part of the loan was disbursed (paid out) after January 1, 1986; AND

d) You haven’t already received a discharge or refund of your loan from the school or USED

If this describes you, you should apply for a loan cancellation.

2. How do I apply for loan cancellation?

You must fill out the application here. After you complete your application, we recommend you make a copy of the completed application for your records. Next, you must send the application to your loan holder.

If you do not know who your loan holder is, we recommend you call Federal Student Aid’s Information Center (FSAIC) at 1-800-433-3243 to request your servicer’s contract information, including their mailing address.

After you determine your loan servicer’s mailing address, we recommend you send the application by United States Postal Service (USPS) Certified Mail.

3. Is there a deadline to submit my application?

No.

4. Do I need to attach any documents to my application?

No. You don’t need to send anything except the application.  If your loan servicer requests more information from you, they will send a letter to the mailing address on your application.

5. What happens after I submit my application?

You should track the delivery status of your application. Loan servicers typically respond to applications within 90 business days of receiving the application from you. You will receive a letter telling you if your application was granted or denied.  If it is past 90 business days and you have not received a response, contact NYLAG.

6. What happens if my application is granted?

If your application is granted, several things will happen. First, you will not have to make any more payments on your loan in the future. Second, all of the payments you have made on your Wilfred loan up until now will be refunded—that is, returned to you. This includes payments you made voluntarily, and also money that was collected from you involuntarily, like by garnishing your wages or taking your tax refunds.

Also, everything related to the loan should also be taken off your credit report. And, if you could not get a federal student loan because your Wilfred loan was in default, you should become fully eligible for federal student loans.

7. What happens if my application is denied?

If you think your application has been wrongly denied, contact NYLAG.

8. Where can I get more information, or help?

If you think that you are eligible to get your loans cancelled and need help with your application, or have other questions, you can contact NYLAG’s Salazar Class Action Hotline at 212-946-0346 or contactsbap@nylag.org.

1. ¿Puedo cancelar mi préstamo?

Probablemente pueda cancelar su préstamo si:

a) No tenía un diploma de escuela secundaria o un G.E.D. cuando se inscribió a una escuela Wilfred (por ejemplo Wilfred Beauty Academy, Washington School of Secretaries or American Business Institute)

b) La escuela no le dio un examen de su “capacidad para beneficiarse” del programa de Wilfred, o le dio un examen que no fue aprobada por el Departamento de Educación de los Estados Unidos (“USED”), o no administró o calificó adecuadamente el examen;

c) Todo o parte del préstamo fue desembolsado (pagado a usted) después del 1 de Enero de 1986; Y

d) Aún no ha recibido una cancelación o un reembolso de su préstamo por parte de Wilfred o USED.

2. ¿Cómo solicito la cancelación de un préstamo?

Debe llenar la solicitud aquí. Tenga en cuenta que la aplicación solo está disponible en inglés. Si atendió Wilfred y necesita ayuda para traducir la aplicación, comuníquese con NYLAG. Después de completar su solicitud, recomendamos que haga una copia de la solicitud completa para sus registros y después envíe la solicitud a el administrador de su préstamo.

Si no sabe quién es el administrador de su préstamo, recomendamos que llame al Centro de Información de Ayuda Federal para Estudiantes (Federal Student Aid Information Center) al 1-800-433-3243 para solicitar la información del administrador de su préstamo.

Después de determinar la dirección postal del administrador de su préstamo, envíe la solicitud por correo certificado (Certified Mail) del Servicio Postal de los Estados Unidos (USPS).

3. ¿Hay un fin de plazo para enviar mi solicitud?

No.

4. ¿Necesito adjuntar algún documento a mi solicitud?

No. No necesita enviar nada excepto la solicitud. Si el administrador de su préstamo le solicita más información, le enviará una carta a la dirección postal que figura en su solicitud.

5. ¿Qué sucede después de enviar mi solicitud?

Debe rastrear el estado de entrega de su solicitud. Los administradores de préstamos generalmente responden a las solicitudes dentro de los 90 días de recibir su solicitud. Su administrador de prestamos debería enviarla la respuesta de su solicitud, si fue concedida o denegada. Si han pasado 90 días y no ha recibido una respuesta, comuníquese con NYLAG.

6. ¿Qué pasa si se concede mi solicitud?

Si su solicitud es concedida, sucederán varias cosas. Primero, no tendrá que hacer pagos adicionales de su préstamo. En segunda, se reembolsarán todos los pagos que haya realizado hasta ahora en su préstamo de Wilfred. Esto incluye los pagos que realizó voluntariamente y también el dinero que se le recaudó involuntariamente, por ejemplo, por menos de embargar su salario o tomar sus reembolsos de impuestos.

Además, la información sobre su préstamo federal para estudiantes debe eliminarse de su informe de crédito. Y, si no pudo obtener un préstamo federal para estudiantes porque su préstamo de Wilfred estaba en defecto, debería ahora ser completamente elegible para préstamos federales para estudiantes.

7. ¿Qué sucede si mi solicitud es denegada?

Si cree que su solicitud ha sido denegada por error, comuníquese con NYLAG.

8. ¿Dónde puedo obtener más información o ayuda?

Si cree que es elegible para cancelar sus préstamos y necesita ayuda con su solicitud, o tiene otras preguntas, puede comunicarse con la línea directa de demanda colectiva de Salazar de NYLAG al 212-946-0346 o contactsbap@nylag.org.

More Information:

Name: Salazar v. DeVos

Dkt. #: 14 Civ. 1230 (S.D.N.Y.2014)

Judge: Hon. Robert W. Sweet

Status: Settled

Claims:

Violation of the Administrative Procedure Act for failure to mail the required notice.

Highlights:

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