A former student of Everest Institute filed a lawsuit yesterday in federal court to challenge the government’s continued collection of defaulted federal student loans from low-income people who borrowed in order to attend a school operated by the disgraced and defunct Corinthian Colleges chain. The Project on Predatory Student Lending, part of the Legal Services Center of Harvard Law School, represents the plaintiff in this lawsuit, Darnell Williams.
Mr. Williams, a resident of Dorchester, Massachusetts, attended a massage therapy program at Everest Institute, formerly located in Chelsea, Massachusetts. The lawsuit alleges that the government has been illegally seizing funds from borrowers who have defaulted on their loans from Corinthian schools. Although the government has broad powers to collect on defaulted federal student loans, it may not seize funds from borrowers when it knows that the defaulted student loan debts are not legally enforceable due to a school’s fraud.