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US Department of Education



A class action lawsuit has been filed against the department for breach of contract on behalf of all individuals who have been obligated to repay consolidated education loans at any time since March 2001 pursuant to a Federal Direct Consolidation Loan Promissory Note. The lawsuit was filed in the United States District Court for the District of Columbia against the US Department of Education for allegedly systematically and unlawfully capitalizing interest that accrues on consolidated student loans between the borrower's June payment date and June 30th.

There are more than three million consolidated student loan borrowers with aggregate debt obligations in excess of $72 billion. The government's practice directly contravenes the student loan documents and costs the borrowers, in the aggregate, millions of dollars each year.

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Reader Comments

Posted by

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I believe I need information on this suit. Please send. Thank you so much!

Posted by

on
Summary, paid on student loan for 7 years at 90% interest rate. I was told it was 6% but they neglected to inform me that was compounded daily. Needless to say my balance didn’t change. The balance went up several thousand and with other bills mounting couldn’t pay. Now, wages are garnished at a 15% rate and my entire tax return is taken. No time frame has been given as to how long this will happen, nor do I know how the money is being applied or the balance. This loan could have been paid off in 5 years but now I’m paying indefinitely without any information whatsoever.

Posted by

on
my student loan was consolidated and my ex is not making the loan payment. How can I split the loan out and repay my share? It was stipulate on my divorce agreement my share of the student loan

Posted by

on
i am having trouble really need your help with this law suit.

Posted by

on
My very first student loan...the company/school find bankruptcy and the govt. said I default which didn't allow me to file under teacher consolidation years ago...among other issues.

Posted by

on
in 2009 I attended Virginia College trade school in Augusta Georgia. At the end of my medical coding and billing course, I was forced to relocate to another state. All I needed for successful completion was an internship. course. I was assured by the internship coordinator that I could complete internship under the schools accrediting guidelines but, I would have to find my own internship site. Immediately upon relocation I found a hospital that was more than willing to help me. I attempted to contact the school's coordinator by phone, email, and written mail for 3 months and no reply was received. Finally, in desperation I contacted the school's ombudsmen. I was again assured that the school would administer my internship, under their administrative department. I entered internship only to find that I had received no training in areas that were crucial to completion of an internship (i.e. DRG classification, ICD-10 coding). In short I received no benefit whatsoever from this school. However, I have $20,000.in student loans that are in default. Is there anything I can do to discharge this debt?

Posted by

on
I was a student at marinelo beauty school o had 929 hours only a few hundred away from graduating and now they are closing I need allí the help I can get to figure this all out

Posted by

on
In 1994 I contacted the Colorado Student Loan Authority to discuss issues regarding student loan balances tied to schools I attended, schools that had both lied to get my business and have since closed their doors.
First, in 1980 I was accepted by Barnes Business College in Denver after The director of admissions told me to state Imhad a GED when at that time I did not. I attended the school for only a few days, but the money loaned to me was never refunded to the lender after I withdrew from the school. The $6000.00 remains in the balance of a student loan I was forced to default on in 1994.
In 1984 I received my GED.
In 1987 I received a promotional letter from Denver Technical College, Colorado Springs to attend a meeting and learn about the school. The admissions officer stated I would never be admitted to a 4 year or a state 2 year school without first receiving a degree from them. The lies continued, tassuring me that all my classes were accredited by the North Central Accrediting Authority for colleges and Universites and each credit hour would transfer. I completed their program in 1990, however not a single credit hour transferred and I was forced to begin all very again after being accepted to BethEl Nursing College and Pikes Peak Community College. While attending Pikes Peak Comminty College Imwas diagnosed with a learning disability which until that point I believe was exploited to get my business.
In 1991 I moved to Mahattan Kansas where I attended Kansas State University, the last school I ever attended and never had the opportunity to graduate from. I never had the money to pay my loans and in 1994 I contacted the Colorado Student Loan Authority who told me my only option was to consolidate. From the very start the education system lied to me and until recent years I succumbed to believing that defaulting, which I did essentially in 1994 was my only option.
I realize my story resembles the stories of many other victims of, what was once, an unregulated corrupt system.
Here we are, 22 years and a bankruptcy in 2001 later and the government is still taking money from tax returns on taxes my husband has paid and money my husband earned all these years to support our family.
I don't know if this forum is the correct place to tell my story, but the timing was right. I welcome any advise, or suggestions directing me to resolve my default issues once and for all. Thank you.

Posted by

on
I had issues in paying student loans. I called complaint to the fed government they transferred me right back to very person I was talking with on the state level. This is crazy my loans started off at Sallie got moved sold or what ever three times and now back at Sallie Mae AKA Navtai.

March 26 2007 A class action lawsuit has been filed against the department for breach of contract on behalf of all individuals who have been obligated to repay consolidated education loans at any time since March 2001 pursuant to a Federal Direct Consolidation Loan Promissory Note.

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