DeVry University Fights Government Efforts to Collect $23M for Discharged Student Loans

Many students take out loans to pay for higher education, whether it be at a college, university, or trade school. Anyone who has a loan is responsible for the debt. But sometimes, students do not have to make repayment because the government determines that their school committed misconduct. Some former students of DeVry University, a for-profit school headquartered in Chicago, recently found themselves in this position. The Department of Education discharged their loans and said DeVry had to repay some of that money to the government. DeVry is currently fighting the DOE’s repayment demand and is asking a judge to halt the government’s attempts to collect over $23 million.

The Government Claims DeVry Mislead Students About Jobs

According to a news report, the DOE alleged that DeVry, which offers mostly online courses, misled prospective students about job placement rates for graduates. The department said that between 2008 and 2015, the university represented that 90 percent of graduates gained jobs in their field within six months of earning degrees. The DOE claimed DeVry’s statements were false because the job placement rate was around 58 percent.

The department said DeVry’s statements misled people across the country and encouraged them to enroll and take out student loans. As a result of this determination, the DOE discharged nearly $71 million worth of loans owed by 1,800 former DeVry students, the news report said.

How The DOE Was Able to Discharge the Loans

The DOE discharged the DeVry loans after deciding that the former students had successful defenses to repayment. The department looked to federal statutory law, which provides that in some situations, student loan borrowers can be relieved of their repayment obligations when their school committed misconduct related, generally, to loans and enrollment. In addition, the department relied on federal regulatory law, which discusses the standards students must meet when raising defenses to loan repayment.

The DOE Targets DeVry for $23 Million

After discharging the loans, the DOE said DeVry had to pay over $23 million to compensate the government for some of its resultant losses. The university did not agree and started an administrative action to challenge the payment demand. DeVry also sued the DOE in federal court in Chicago. In the lawsuit, the university argues that the department’s demand for the money is unconstitutional.

DeVry, on June 30, 2023, asked the federal court to stop the DOE from moving forward with its efforts to collect the $23 million. The university says the government shouldn’t be allowed to seek the money while the federal lawsuit is pending. The court has not made a decision on this yet.

Do You Have a Defense to Student Loan Repayment?

If you have a student loan and believe your school engaged in misconduct related to enrollment and the loan, you may be able to seek a discharge from the government. The Education Law Team at the LLF National Law Firm can help you. They have vast experience assisting students nationwide who find themselves at odds with their school. Call us at 888-535-3686 or contact us online today.