How to Qualify for the Everest College Lawsuit, Student Loan Forgiveness or Discharge Benefits
UPDATED Tuesday March 24th, 2020
I have good news for Everest College students: there’s a very good chance that you can qualify for a student loan discharge, and maybe even for a refund for any payments you’ve already made toward your outstanding federal student debt related to attending Everest.
You can access these great debt forgiveness benefits via one of two Federal student loan forgiveness programs, using either the Borrower’s Defense To Repayment Program, which offers forgiveness and refund benefits to students who were defrauded by a school, or the Closed School Loan Discharge Program, which lets students eliminate loans that were taken out for schools that shut down before they could graduate.
In this post, I’ll explain how to find out if you qualify for one or either of these programs, then I’ll walk you through applying for the benefits, and detail how to increase the odds that your application is approved.
NEWS ALERT: Per the official Federal student loan website, a Federal disctrict count is preventing the U.S. Department of Education from collecting on Federal Direct Loans held by Corinthian Colleges borrowers, including students who attended Everest, Heald and WyoTech campuses.
This is the result of a lawsuit called Manriquez v. DeVos (No. 3:17-cv-7210-SK), a case from Northern California that is still pending. This case revolves around the Borrower’s Defnse to REpayment Program, stemming from a claim that the borrower’s loans should be forgiven because Everest misrepresented job placement rates for certian programs.
You can take advantage of this lawsuit by immediately filing for a BDAR discharge, which will automatically force the Department of Education to place your loans into forbearance and/or in stopped collections status.
But Before I Explains BDAR and the Closed School Programs…
Let me first give you a quick bit of advice – so many applications have flooded the Department of Education that it’s now taking them an average of 2+ years to respond to people, so while I definitely do suggest submitting an application, I don’t recommend sitting on your hands until you hear back from them, because you’re highly unlikely to receive any immediate financial relief.If you're truly struggling with student debt, then you should also consider paying a Student Loan Debt Relief Agency for help. Why? Because the people working at these companies deal with student loans all day, every day, and they're your best chance at figuring out how to get your loans back under control.
I've interviewed all sorts of debt relief agencies over the past 10 years, talking to all sorts of so-called "experts", and I can tell you that in all honesty I've only found two companies I trust to offer actual financial relief to people struggling with student loans.
For help with FEDERAL Student Loans: Call the Student Loan Relief Helpline at 1-888-906-3065. They will review your case, evaluate your options for switching repayment plans, consolidating your loans, or pursuing forgiveness benefits, then set you up to get rid of the debt as quickly as possible.
For help with PRIVATE Student Loans: Call McCarthy Law PLC at 1-877-317-0455. They will negotiate with your lender to settle your private loans for much less than you owe, then get you a new loan for the much lower, settled amount. NOTE: McCarthy Law can ONLY help with Private student loans.
If you do decide to call one of these companies and you have a bad experience with either of them, PLEASE make sure to come back and let me know about it in the Comments!
The Everest College Lawsuits
Everest College closed its doors in 2015 after its parent company, Corinthian Colleges, Inc. filed for bankruptcy.
Corinthian (and therefore Everest itself) came under scrutiny from Federal regulators and watchdog agencies for misrepresenting its post-grad placement rates and targeting vulnerable, low-income students by pressuring them to take out student loans in order to attend the school.
In March of 2016 the Attorney General of the State of California ordered Corinthian to pay $1.1 billion in penalties and restitution for false advertising, which means that Everest has been not just accused of false advertising, but proven to have committed that illegal activity.
This opens Everest College up to Borrower’s Defense Against Repayment Discharge proceedings, meaning that anyone who attended the school can use this evidence of fraudulent behavior as the reason why their Everest loans shouldn’t exist at all, and should be officially wiped out.
If you still owe Everest money, pay close attention to the rest of this post, because I’m going to show you how you may be able to get the debt eliminated completely.
Discharging Everest College Loans via Borrower’s Defense Against Repayment
Anyone who took out a loan to attend a school that committed fraud against them is eligible for loan forgiveness or loan discharge via the Borrowers Defence Against Repayment Program.
This is a program created by the Federal Government to protect borrowers who were illegally convinced that should attend schools who couldn’t live up to their promises, and which may allow you to wipe out all the debt you owe for your Everest education.
How? Because Everest College (via the Corinthian Colleges lawsuit) has been proven to have broken the law, which means that all you need to do is prove that Everest lied to you, personally, and that it was only because of their lies that you were convinced it’d be a good idea to borrow money to attend their school.
Are you thinking that this sounds too good to be true? Don’t worry, Everest College loan forgiveness is the real deal, and this is no scam. Other former students of Everest College are already having their student loans forgiven right now, which sets a precedent for forgiveness, and means that you could get your debt wiped out too!
Keep in mind though that you’re going to need to link the lawsuit and Everest’s illegal marketing activities to your personal claim, which means you’ll have to be able to explain exactly why you deserve to receive a discharge, but as long as you actually did experience their false advertising claims, or some other form of fraud, then you should be good to go.
One thing to keep in mind is that you do need to take your time with the BDAR application, because you really only get one shot at this process, and because if you fill it out correctly you stand a very good chance of having your student loan forgiven.
If you’re one of the truly lucky ones, then you may even qualify for a refund for any money you’ve already paid toward the loan.
How to Write Your Borrower’s Defense Claim
The most important thing to know about writing the Borrower’s Defense Claim is that you must emphasize that the school engaged in illegal activity which directly impacted your decision to borrow money so you could pay for their program costs.
If all you do is point out that the school broke the law, got caught, and was punished, then you won’t be approved for a discharge of your own, because you have to prove that the only reason you thought it was a good idea to attend Everest was because they defrauded you.
Your BDAR application should focus entirely on explaining how you would have never taken out a student loan to attend Everest College if the school hadn’t engaged in fraud by lying to you about their placement and job success rates,
But you can’t just say “They lied to me, and tricked me into attending”, you need to be specific about what they said or promised, and when it happened too. Remember, BDAR is a legal process, so DO NOT LIE, and don’t even exaggerate. If you weren’t actually defrauded, do NOT file a BDAR application, because you could face enormous legal repercussions.
If you were defrauded by Everest, then spend some time thinking about when you were told certain things, what kinds of marketing messages were portrayed to you, and where you experienced them. Was it over the phone? In person? Via email? Do you have any written records or examples of the claims that they made? What exactly did they tell you? What did they promise you? What was it that they said which convinced you to take out that student loan?
All of this needs to be included in your BDAR application, so if you really want to get a discharge approved, you may need to spend a couple hours thinking about how things went down before you even start filling out the paperwork..
Now, let’s go over what kinds of fraudulent activity Everest College engaged in that got them penalized in the first place, and as you read through the list, ask yourself if any of these things happened to you. If they did, remember that you should include them in your BDAR application, because the most evidence you can accumulate, the more likely you’ll be to receive a discharge.
What Fraudulent Activity Was Everest College Been Accused Of?
Corinthian Colleges, Inc., the parent company of Everest College, has been accused of lying about their job placement rates and engaging in predatory practices by pressuring vulnerable low-income students to take out student loans in order to attend their schools.
When you were thinking about applying to Everest, did you hear anything about their job placement rates? Did anyone tell you that a certain percentage of graduates were able to acquire jobs within their fields of study? Did anyone talk about earning specific amounts after graduation? Or having specific roles at their new jobs?
As I mentioned above, you can’t simply point out that Everest College lied to the general population, and say that make you entitled to loan forgiveness as a former Everest College student.
What you need to do is clearly show that the school did this to you, personally. You need to provide details of how they lied to you about their job placement rates and how they pressured you into taking out a student loan. If you can’t do that, then your BDAR application will get rejected, and you won’t receive forgiveness or discharge benefits.
Let’s review exactly what Everest College was accused of in the lawsuit against Corinthian Colleges. Remember, as you read through this stuff, think about whether or not Everest did any of these things to you. If they did, you can file a Borrower’s Defense claim for them and you’ll have a good shot at getting it approved.
Everest College’s Illegal Marketing Activities
Everest College has been accused of the following illegal activities, each of which open the school up to BDAR discharge claims:
- Misrepresenting their job placement rates. For example, telling prospective students that 100% of their graduates in a particular field could find a job within the first month after graduation
- Misrepresenting the quality of a program by telling students that they will be able to easily pass licensure exams in their field after completing a degree from Everest College
- Pressuring vulnerable, low-income students into taking out huge loans in order to pay the tuition cost for one of their sub-standard education programs
Did Everest College do any of these things to you? If so, it’s your right to have your student loan forgiven, and you need to submit a BDAR claim as soon as possible.
Where Can I File My Borrower’s Defense Claim?
To file your Borrower’s Defense claim, go to the official US government website and go through their BDAR wizard. If you want to read the entire form because you start making your way through the wizard, click on the button at the bottom that says “View Form”.
It’s very important that you file your claim here, at the official US government website set up for the Borrower’s Defense Program.
Don’t file the application anywhere else, no matter what anyone promises you, because there are tons of Student Loan Forgiveness Scams floating around and you definitely don’t want to fall into one of their traps!
You wouldn’t believe the number of scammers out there who will make all sorts of wild promises in order to make some easy money by stealing your personal information, so be extremely cautious about deciding who to trust.
Checking The Status of My Application
Unfortunately, the Borrower’s Defense Claim applications are taking forever to process, which many people waiting over a year before hearing back on the status of their claim.
But don’t let the idea of a long wait stop you from applying, because BDAR is truly your best shot at getting your loan forgiven and having money refunded, even if President Trump and Education Secretary Betsy DeVos hate the program and want to dismantle it entirely.
If you think you’ve got a shot at receiving an approval, my advice is to fill out your application as soon as possible so that even if the program gets cancelled, your application will be in the system and they’ll be forced to honor the process and provide you with forgiveness (if you quality for it).
There’s never been a better student loan forgiveness program on offer, so make sure to take advantage of Borrower’s Defense even if your claim is a long-shot at getting approved.
Receiving Forgiveness via the Closed School Loan Discharge Program
As I mentioned above, there are two ways to receive student loan forgiveness as a former student of Everest College, so if you don’t feel that the school defrauded you and therefore don’t think you’ll qualify for the Borrower’s Defense program, then have no fear, because there is another way.
The Closed School Loan Discharge Program is your second best way to qualify for an Everest College discharge, and it was created for students who were still attending the school when it shut down.
The nice thing about Closed School Loan Discharges is that you don’t have to do any legal wrangling or convincing via arguments and evidence, because Closed School Discharges are a binary thing – if you were a student who left the school no more than 120 days prior to it’s closing (or if you never left it at all, but were still studying at the time of the closure), then you qualify for a complete student loan discharge.
And that’s a great thing for those of you who were left in the cold when Everest shut their doors!
Eligibility Requirements for Closed School Discharges
I have an entire page devoted to the Closed School Loan Discharge program, so if you need any further details after reading through the information below, be sure to head there first.
Remember, in order to qualify for the program you must have either been a student at the school at the time it closed or have left no more than 120 days before it closed. If you went to Everest in the 1990’s, then dropped out and never finished, you’re still going to owe whatever money you borrowed because you won’t qualify for a Closed School Discharge.
But that’s not all, because there are a couple of other conditions you need to satisfy as well. First, you cannot be attending another school after having transferred your credits from Everest College prior to the date it closed, and second, you also cannot have completed all the credits required for a degree from Everest College but failed to take the diploma for some reason.
If either one of these two conditions apply to you, you will not qualify for the Closed School Loan Discharge program.
If you can satisfy these conditions, however, there’s a very good chance that you’ll be able to have your student loan forgiven. Therefore, you should definitely apply.
How Do I Apply for a Closed School Discharge?
To apply for the Closed School Loan Discharge program simply fill out the application and submit it to the people who service your loan.
The people who service your loan are the ones that send the money to via your student loan payments every month.
Every loan servicer has a different procedure in place for processing these applications, so you’ll need to find out what your servicer requires before you can determine how to proceed.
After you submit your Closed School Loan Discharge application, your servicer is legally obligated to inform you of their process, and then as long as you qualify for the discharge, and you follow their instructions on what to do next, you should get your debt fully forgiven.
Which Program is Better? Borrower’s Defense or Closed School Discharges?
I wouldn’t say that one program is better than the other. They will both discharge your student loan debt and both can possibly reimburse you for any payments that you’ve already made too.
Assuming that you qualify for both programs, however, I would choose the Closed School Loan Discharge program simply because the applications for the Borrower’s Defense program are taking so long to process.
Nobody wants to keep paying down a loan that shouldn’t exist in the first place, especially for a year or longer while waiting for a response from the Department of Education, so I would advise that you pursue the Closed School Loan Discharge if it’s an option for you.
However, it’s ultimately your choice. Read through the requirements for both programs carefully and choose the program that suits your particular situation best.
Will I Owe Taxes on Forgiven Debt?
Yes, any discharged student loan debt is considered income and therefore taxable by the IRS. That’s bad enough. However, it gets worse. The IRS is going to come after you for the money when you file your next tax return, and they’re not going to be as easy to deal with as your student loan servicing company.
Why? Because while your loan servicer lets you break out the debt you owe them into small, affordable monthly payments, the IRS is going to request that you pay them all at once, in a single lump sum.
Most people don’t have that kind of money lying around, and if you’re like most people, then you’ll need to work with the IRS and apply for their long-term payment plan in order to make this an affordable process, so don’t think you’re free and clear just yet, because that could be a difficult process too.
To put it in numbers, let’s say that you have $100,000 in student loan debt forgiven. If your taxable income is 30% that means that you will owe the IRS a whopping $30,000, and it means that they’ll want you to pay them that entire $30,000 all at once with you next tax return.
Since most people suffering under the burden of student loan debt don’t have that kind of money on hand I’ve created an entirely new website called Forget Tax Debt, which offers advice on dealing with IRS tax debt, just like I do here for Student Loans.
If you’re having trouble with taxes, or the IRS, then have a read through my new site, looking at articles on Filing & Paying IRS Back Taxes, IRS Tax Debt Settlements, The IRS Fresh Start Program, and IRS Tax Debt Forgiveness.
Dated News from the Everest Case
NEWS ALERT: On Thursday, December 13th 2018, Betsy DeVos’s Department of Education announced that they will begin immediately issuing $150,000,000 in Borrower’s Defense to Repayment Discharges. This is in direct response to a recent Federal ruling that DOE needed to terminate all delays in the BDAR approvals process.
CNN reports that about half of the $150 million is being used to cancel Corinthian Colleges debt, and since Everest is one of the Corinthian schools, you’re almost certainly going to see your loans cancelled if you made a good case on your BDAR application. DOE said they’d start notifying borrowers of impending discharges on Friday December 14th, and that the official cancellation would come through within 30 to 90 days.
If you’ve already applied for BDAR, make sure to pay close attention to your emails, and if you haven’t applied yet, get that application in TODAY to increase the odds that you’ll receive forgiveness during this wave of approvals!
Where Else Can I Ask Questions?
If you need help with anything related to student loans, then be sure to visit the other pages of my site, or leave a question if the Comments section below. I try to respond to all comments within 24 hours, and I’d be happy to help you too.
For questions about getting Help with Federal Student Loans, check out my pages on Federal Loan Forgiveness, Federal Loan Bankruptcy Discharges, Federal Loan Delinquency & Default, Federal Loan Consolidation and Federal Loan Repayment Plans.
And if you need Help with Private Student Loans, you’ll want to visit my pages on Private Student Loan Forgiveness, Private Student Loan Consolidation, Private Student Loan Bankruptcy and Private Student Loan Default.
Finally, remember to be careful about who you take advice from, because this space is rife with scam artists trying to steal personal information and extract money from desperate people. Don’t pay anyone for your help unless you’ve fully vetted them, or someone you trust has recommended them to you.
Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.