Discharge Student Loan?

If anyone is considering an attempt to discharge a student loan debt by one of the "accepted" conditions, ie., False Certification, Ability to Benefit, etc., what follows below is not going to cheer you up.

Students Tricked into Signing Enrollment and Financial Aid Documents Challenge Denials of Loan-Discharge Applications

White v. Riley, No. 98CV-6678 (E.D. Pa. filed Dec. 24, 1998)

Plaintiffs represented by Irv Ackelsberg; Kirsten E. Keefe, Community Legal Services, 3638 N. Broad St., Philadelphia, PA 19140; 215.227.2400.

Plaintiffs filed their complaint in this class action challenge to defendant secretary of educations denial of their applications for loan discharges under Title IV of the Higher Education Act of 1965, 20 U.S.C. 1070 et seq. Plaintiff student loan borrowers were falsely certified by truck-driving-by-correspondence school as meeting an eligibility requirement of Title IV: an "ability to benefit" from the program. Plaintiffs were homeless and addicted to drugs at the time, they signed enrollment and financial aid documents in exchange for a small amount of money. School certified plaintiffs even though plaintiffs had not taken and passed an admission test or remedial course and did not have driver's licenses. School also falsely certified that plaintiffs were in attendance and were making satisfactory progress, also an eligibility requirement, 20 U.S.C. § 1091(a)(2), when in fact they did not attend or participate in any studies. With two exceptions, plaintiffs individual requests for loan discharge were denied. In response to a request for a group discharge, defendant discharged some borrowers enrolled by school before plaintiffs enrollment. Defendant stated that lack of a drivers license, even when enrolling in a truck-driving course, was not grounds for false-certification loan discharge. Plaintiffs allege that, in violation of the Administrative Procedure Act, defendants denials of their discharge requests were arbitrary, capricious, not in accordance with law, and unsupported by substantial evidence. They claim that a group discharge should be compelled, as such a discharge has been unlawfully withheld or unreasonably delayed, and that defendants failure to consider evidence of the schools false certification of plaintiffs participation and progress is unlawful and unreasonable.

Don't throw any money away on litigation.

pf