Thousands of student-loan borrowers whose schools shut down have been illegally denied debt relief, a new lawsuit says
Source: Business Insider ·
A new lawsuit said the Trump administration is failing to use its authority to process student-debt relief for borrowers whose colleges closed.
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A new lawsuit said the Department of Education is failing to process student-debt relief for thousands of borrowers.Kevin Carter/Getty ImagesThe Education Department is facing another lawsuit over withholding student-debt relief for borrowers.The lawsuit said the department is not processing relief for borrowers whose schools shut down.It leaves borrowers who qualify stuck paying their balances and facing default, the lawsuit said.Student-loan borrowers whose schools shut down are not getting the debt relief they're owed, a new lawsuit said.On Wednesday, advocacy group Student Defense filed a class-action lawsuit on behalf of Kendrick Gaussoin, a borrower who took out student loans to attend the Brooks Institute. The visual arts college shut down in 2016 due to financial distress and new regulation on for-profit colleges; Gaussoin was left with student debt but no degree.A mechanism called a "closed school discharge" allows borrowers whose schools shut down to receive debt relief. A…