Monday, July 25, 2016
Following up on my previous posts:
Law360 op-ed: No Good Reason For New Student Loan Forgiveness Rules, by Anthony T. Caso (Chapman):
You may have read news reports over the past few years that new lawyers are having more and more trouble finding a job. The recession that hit in 2008 seems to linger on, especially in the legal market. The U.S. Department of Education has a solution. It has proposed new regulations that will spawn a new industry of spurious lawsuits against colleges and universities. Everybody will have to hire lawyers — and lawyers will be the only clear winners in the battles to come.
The proposed regulations create new opportunities for college graduates (and dropouts) to avoid repaying student loans. Called “borrower defense,” existing regulations allow forgiveness of student loans when the college violates state law, committing fraud. That means that the college made a knowingly false representation of a material fact and the student reasonably relied on that representation to his or her detriment. ...
But the Department of Education does not want you to have to think that hard about your education choice. Therefore, they are replacing the old fraud standard with “substantial misrepresentation,” which they helpfully define to mean “misleading under the circumstances.” You might ask what that means. Nobody knows. The standard is left intentionally vague so that Department of Education bureaucrats can make it up as they go along. If there is no legal standard, then everybody is subject to suit.
Did the school advertise some leading professors who retired or moved to other schools before you graduated? Obviously misleading — sue them. Did the school mention some of its more famous alumni — perhaps a Hollywood star — while the only job you can get with your drama degree is as a barista at Starbuck’s? Now you can sue, claiming that the glossy puff piece from the school was misleading. ...
As a law professor, I support efforts to help find employment for law graduates. I hope, however, that they will find rewarding work helping people rather than clogging up the legal system with spurious claims about misleading college brochures that fronts the bill to students of the next generation as well as the American taxpayer.