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Lawsuit Accuses DeVos & Education Department of Shortchanging Cancer Patient

Department’s Unjustified Denial of Loan Discharge Application Leaves Borrower With $100,000 Loan and No Degree 

WASHINGTON, DC An Illinois borrower sued Secretary of Education Betsy DeVos and the Department of Education today, for unlawfully denying him a loan discharge after his school closed while he was on leave battling cancer. Rob Armour is represented by Student Defense, a non-profit organization dedicated to protecting students’ rights. The lawsuit targets the Department’s unfair handling of closed school loan discharge applications, which violate borrowers’ constitutional due process rights.

“The Department denied my loan discharge application when they knew I was on a leave of absence fighting stage IV cancer when my university shut down,” said Rob Armour. “Having cancer is hard enough, but to have the Department of Education give me the runaround when I asked for help has been truly disappointing.”

A brief video of Rob talking about his experience is available here.

“An improperly denied closed school discharge can be catastrophic, leading to a lifetime of crippling debt,” said Student Defense Senior Counsel Alex Elson. “The Department of Education's process failed Rob Armour, who was placed into an impossible situation through no fault of his own. We’re hopeful this case leads to improved procedures for all borrowers, so that no one is put through this unfair process again.”

Rob spent six years attending the doctoral psychology program at Argosy University in Schaumburg, Illinois. The school abruptly closed in December 2018, while he was on an approved leave of absence for stage IV colon cancer. He was nearly finished with his degree when the school closed, but now has over $100,000 in student loan debt and no degree to show for it.

Prior to his studies at Argosy University, Rob spent 25 years as a prison guard for the Illinois Department of Corrections, and earned associates, bachelors and masters degrees while working full time and attending college at night. He enrolled in Argosy’s Psy.D. program in order to work as a staff psychologist for the Department of Corrections. 

Closed School Discharge

Under the Higher Education Act, students attending a school within 120 days of its closure, or who are on an approved leave of absence, are entitled to a discharge of their federal loans. Rob met all of the necessary criteria for such a discharge when Argosy University closed on December 14, 2018.

Rob applied for a discharge in March. In April, he received a letter from his loan servicer and the Department, stating that his application was complete, and that he appeared to meet the criteria for a discharge. The following month, he received another letter from the Federal Student Aid office that simply stated the Department had “concluded that [he did] not meet the eligibility criteria for this discharge.”  The sole justification provided for this reversal was the following statement: “You withdrew from Argosy University-Schaumburg more than 120 days before the official school closure date, as established by the U.S. Department of Education.” This was simply incorrect, as Rob never withdrew from school.

The denial did not address the extensive evidence provided in Rob’s application, including medical records and emails from the school showing his approved leave of absence in the appropriate time frame. The Department also did not provide notice of the reasons for the denial, nor did it give him an opportunity to challenge it. For these reasons, the denial is arbitrary and capricious under the Administrative Procedure Act, and violates the Fifth Amendment’s Due Process Clause.

As described in the complaint, improper denials of closed school discharge applications have been cited by members of Congress, state attorneys general, and in widespread media reports. By failing to provide any avenue to appeal an improper denial, the Department of Education shuts out deserving borrowers from a life-changing benefit.

The lawsuit seeks immediate approval of Rob’s closed school discharge application, and asks the court to declare the Department’s denial violated his due process rights.

A copy of the lawsuit filed today is available here.

Tags   Litigation