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Education Department Sued Over Defrauded Borrowers

March 20, 2018

Four plaintiffs who attended Corinthian Colleges programs are suing Secretary Betsy DeVos and the Department of Education in U.S. district court over a plan to award partial relief of student loan debt to borrowers defrauded or misled by their institutions.

The department in December announced plans to award relief of approved borrower defense to repayment claims based on the earnings of graduates who pursued a particular program of study at career education programs.

The Associated Press reported last week that students who attended Corinthian programs had begun receiving notices of specific award amounts.

The plaintiffs asked the court to order the Department of Education to grant complete loan relief to borrowers with approved claims and argued that its use of the earnings formula violates the Administrative Procedure Act and constitutes "arbitrary and capricious" rule making.

The plaintiffs are represented by Harvard Law School's Project on Predatory Student Lending and Housing and Economic Rights Advocates.

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Andrew Kreighbaum

Andrew Kreighbaum joins Inside Higher Ed as our federal policy reporter. Andrew comes to us from The Investigative Reporting Workshop. He received his master's in data journalism at the University of Missouri, and has interned at USA Today and a national journalism institute in Columbia, MO. Before getting his master's, Andrew spent three years covering government and education at local papers in El Paso, McAllen and Laredo, Texas. He graduated in 2010 from the University of Texas at Austin, where he majored in history and was news editor at The Daily Texan.

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