Law School Group Sues Federal Government

Harvard Law School’s Project on Predatory Student Lending has sued the federal government in an effort to access documents from the Education Management Corporation, an operator of for-profit colleges that settled a case with the U.S. Department of Justice in November 2015.

In the original case, filed in 2011, the federal government and five states filed a complaint against the EDMC, alleging illegal recruiting practices and consumer fraud. The case was settled for $95.5 million, none of which went to relief for students who incurred federal loan debt from attending EDMC schools.

“The primary allegation was that EDMC unlawfully recruited students, in contravention of the Higher Education Act’s Incentive Compensation Ban, by running a high pressure boiler room where admissions personnel were paid purely on the number of students they enrolled,” according to the press release from the Department of Justice’s Office of Public Affairs after the case was settled.

The Law School’s Project seeks documents produced by EDMC during the original lawsuit and provide details about the fraudulent practices. Attorneys for the project say the documents could help affected students recover from their debt.

“The documents from this lawsuit regarding EDMC’s recruitment practices are likely to strengthen claims for reliefs of hundreds, if not thousands, of former students of EDMC-owned schools,” wrote Amanda Mangaser Savage ’10, the Project’s attorney who filed the lawsuit, in a press release.

The Project first submitted a Freedom of Information Act request for EDMC’s documents on June 20, 2016, and the Justice Department were summarily denied the request on Sept. 6, 2016, according to the lawsuit.

In Dec. 2016, the Project appealed the denial on the grounds that the Department of Justice’s ruling was not specific enough to justify withholding the records.

Since then, the Department of Justice has not responded to the Project’s request for the documents.

“DOJ’s withholding of responsive records and failure to make a determination with respect to the Project’s appeal not only violate the Project’s rights under FOIA, but also hinder the Project’s ability to obtain relief for former EDMC students; inform the public about for-profit education; and advocate for policies that will protect low-income student loan borrowers,” the plaintiffs write in the lawsuit.

Savage said the Law School Project’s lawsuit aims to benefit students who incurred debt from EDMC schools and also taxpayers whose dollars are going to for-profit colleges. The $95.5 million the case was settled for was “less than one percent of the more than $11 billion in taxpayer-funded federal student grants and loans that the government alleged EDMC received between July 2003 and the suit’s filing,” according to the Project’s press release.

“I think the most palpable way that this will assist students is in getting their federal student loan debt canceled, but I also think there is a significant, broader public interest here,” Savage said.

—Staff writer Julia E. DeBenedictis can be reached at julia.debenedictis@thecrimson.com. Follow her on Twitter @julia_debene.