Toby Merrill

A federal judge has ruled that Education Secretary Betsy DeVos' delay of a key student borrower protection rule was improper and unlawful. "This is such an important win for student borrowers and anyone who cares about a government that operates under the rule of law," says Toby Merrill, of Harvard Law School's Project On Predatory Student Lending.

...“There is no return on investment for students who attended schools like the Art Institute,” said Toby Merrill, director of the Project on Predatory Student Lending at Harvard Law School. “Taking out loans to pay the high prices that these schools charge benefits their investors while leaving students with mountains of debt and without the professional opportunities they were seeking.”

...ITT’s chief executive, Kevin Modany, agreed to pay $200,000 to settle a suit with the Securities and Exchange Commission over claims the school misled investors about the impact of two failing student loan programs to the company’s bottom line. The company’s chief financial officer, Daniel Fitzpatrick, will pay $100,000...The contrast in fates between former ITT students like Schettler and the company’s top executives is “incredibly grotesque,” said Toby Merrill, the director of Harvard Law School’s Project on Predatory Lending. At the same time that the students are coping with debt that’s not dischargeable in bankruptcy that they can’t get rid of by filing for bankruptcy and being told to take their degrees off their résumés when job-hunting, “the shell of the company is dischargeable in bankruptcy and the debt is gone,” she said. And the executives are “being told that they can just walk away,” added Merrill, who is representing former ITT students as part of the bankruptcy process.

...“It is outrageous that the executives get to walk away with a sweetheart deal from the SEC while ITT students will be lucky to get a sliver of justice in ITT’s bankruptcy and the Department of Education refuses to cancel students’ fraudulent debt,” said Toby Merrill, director of the Project on Predatory Student Lending at Harvard Law School and an attorney representing the students in the bankruptcy case.

Betsy DeVos’s Department of Education must stop collecting the federal student debt of some borrowers who say they were ripped off by a now-defunct for-profit college, at least for now. That’s according to an order issued Tuesday by Sallie Kim, a judge in the Federal District Court in San Francisco. It applies to students who attended certain Corinthian College programs beginning as far back as 2010 if they’ve applied for relief from their federal loans and only had them partially forgiven. The order also applies to borrowers who’ve applied for relief and are awaiting a response and to those who apply for relief in the future...“It’s a huge victory,” said Toby Merrill, the director of Harvard Law School’s Project on Predatory Lending, which is representing the borrowers in the case. “But in a way it’s also it’s dispiriting that we’re still fighting this.”

A federal court has ruled that the Education Department violated privacy laws with regard to students defrauded by the Corinthian for-profit college chain. In a break with Obama administration policy, Education Secretary Betsy DeVos announced in December that some students cheated by the now-defunct schools would only get a part of their federal student loan forgiven. In order to determine how much to forgive, the agency analyzes average earnings of graduates from similar programs. But a California district court ruled late Friday that the department's use of Social Security Administration data in order to calculate loan forgiveness violates the Privacy Act. The court ordered that the Education Department stop the practice and stop debt collection from these students...The decision marks an important victory for students challenging the partial loan forgiveness rule. Toby Merill, director of the Project on Predatory Student Lending at Harvard University, which is representing the students, hailed the decision. "The notion that students got anything other than negative value from Corinthian has been roundly disproved by student experience and the judgment of employers and the legitimate higher education sector," Merill said in a statement."

Students who attended for-profit colleges filed more than 98 percent of the requests for student loan forgiveness alleging fraud by their schools, according to an analysis of Education Department data. The study by The Century Foundation represents the most thorough analysis to date of the nearly 100,000 loan forgiveness claims known as borrower defense received by the agency over the past two decades and paints an alarming picture of the state of for-profit higher education in America...“The for-profit college industry scams students across the country and taxpayers and that’s why the industry, including industry insiders who are now staffing the Department of Education, is now fighting so hard against rules that would clarify the borrower defense process,” said Toby Merrill, director of the Project on Predatory Student Lending at Harvard University, a legal services clinic that represents defrauded students. “If for-profit schools don’t want to be responsible for borrower defense claims and reimbursing taxpayers, then they could simply not cheat their students.”

The National Consumer Law Center (NCLC) released a report this month chronicling the experiences of borrowers who had their EITC seized to pay back a student loan. Some told NCLC they were relying on the refund to improve their housing situation, others said they planned to use it to fix the car they need to get to their job and still others worried that losing the EITC could push them into homelessness...Perry’s story is similar to some of what Toby Merrill hears representing borrowers who have been misled by for-profit colleges as part of her work with the Project on Predatory Student Lending, a program at Harvard Law School that Merrill directs. Her clients often have their EITC seized over a student loan that Merrill argues the government doesn’t have a legal right to collect because they were made under fraudulent circumstances. “The Department of Education frequently seizes Earned Income Tax Credits from definitionally low-income borrowers whose loans aren’t even enforceable,” she said.

An op-ed by Toby Merrill and Eileen Connor. For years, predatory for-profit colleges have exploited the promise of higher education, cheating students and leaving them in mountains of debt they never should have had. Making it worse, the industry has been enabled by a Department of Education that has made excuse after excuse about why it can not step in to help students. Last week, the Education Department ran out of excuses.

The Trump administration has paused processing claims to help borrowers who say they’ve been duped by their schools...To be one of the thousands of borrowers waiting in limbo for a determination of their claim is “terrible,” said Toby Merrill, the director of the Project on Predatory Student Lending at Harvard Law School, which represents former for-profit college students who’ve been harmed by their schools.

For the past several years, students who believe they’ve been scammed by their colleges have waited in limbo while policy makers and industry stakeholders determine their fate. This week provides a vivid reminder of their plight. Starting Monday, the Department of Education will convene a group of representatives from a variety of sectors to develop a rule for how and when these borrowers can have their federal student loans forgiven...But consumer advocates say the delays are simply a pretext for the Department to try to deny borrowers access to relief they’re entitled to under the law. Toby Merrill, the director of Harvard Law School’s Project on Predatory Student Lending, described the new rule-making process as “regulatory theater.” “I don’t think that the Department is acting in good faith on behalf of borrowers,” she said. “This administration has only ever sided with the predatory for-profit college industry against borrowers — including against borrowers’ legal rights.”

Two women who claim they were defrauded by a for-profit college have sued the Education Department and a private loan servicer in a case their attorneys say could provide a new legal remedy for tens of thousands of students frustrated with the department's inaction on claims seeking loan forgiveness..."People's rights not to pay for defective products is well established in law, so whatever the Department of Education is or is not doing, the legal rights of borrowers continue to exist and are enforceable against the government just as they are against private parties," said Toby Merill, a litigator at Harvard University's Project on Predatory Student Lending, which represents defrauded students.

Students who attended for-profit colleges filed more than 98 percent of the requests for student loan forgiveness alleging fraud by their schools, according to an analysis of Education Department data published Thursday...“The for-profit college industry scams students across the country and taxpayers and that’s why the industry, including industry insiders who are now staffing the Department of Education, is now fighting so hard against rules that would clarify the borrower defense process,” said Toby Merrill, director of the Project on Predatory Student Lending at Harvard University, a legal services clinic that represents defrauded students. “If for-profit schools don’t want to be responsible for borrower defense claims and reimbursing taxpayers, then they could simply not cheat their students.”

When attorneys at Harvard Law School’s Project on Predatory Student Lending learned Education Secretary Betsy DeVos was speaking at the Ivy League university Thursday evening, they saw an opportunity to connect her with the for-profit college students they serve... The attorneys extended the secretary an invitation last week to meet these former students, but she declined. “The people who have been affected by the secretary’s policies deserve to have their voices heard,” said Toby Merrill, director of the Project on Predatory Student Lending. “I’m disappointed that she refused to meet with our clients, but not completely surprised given how frequently the department has sided with industry over students.”

Betsy DeVos is coming to Boston and she’s in high demand, not just from friendly quarters...The multiple invitations may be less an indication of DeVos’s popularity and more a sign of how polarizing a figure she and education department have become in recent months. “All we’re asking is for a few minutes for her to hear the perspective of people who have been harmed by these schools,” said Toby Merrill, director of the Project on Predatory Student Lending at Harvard. “Based on the actions she has taken, she doesn’t seem like she’s getting that perspective.”

Thousands of former students in Massachusetts and across the country continue to be hounded about private loans they took out to attend for-profit schools that many say failed to provide the education they promised and have since shut down. The US Department of Education has agreed to wipe out some of the millions of dollars in federal loans that students loaded up on to attend institutions such as Corinthian Colleges Inc. and ITT Technical Institute, because regulators allege that they were predatory and left students in the lurch when they abruptly closed. But many of these same students continue to be stuck with their private loans...“For the private student loans, it’s harder to get immediate relief,” said Toby Merrill, director of the Project on Predatory Student Lending at the Legal Services Center at Harvard Law School. “There’s a lot of damage done to students.”

Following Education Secretary Betsy DeVos’ decision to “reset” new regulations put in place to protect students at for-profit colleges, two separate lawsuits now accuse the Secretary of breaking federal law by running roughshod over the regulatory process when she delayed the so-called Borrower Defense rule, which would have made it easier for defrauded students to get out from under their student loan burdens...Toby Merrill, director of Harvard Law’s Project on Predatory Student Lending, says that delaying the rule will affect hundreds of thousands of student loan borrowers who have bona fide Borrower Defense claims but must navigate a byzantine and outdated system. “Not only does the Department want to pull back the process it has committed to, but it also is capitulating to companies that want to keep borrowers from enforcing their rights in court,” says Merrill.

As the U.S. Department of Education readies for an arduous bureaucratic process to overhaul the rule allowing defrauded students to discharge their debt, advocates are wondering when thousands of borrowers who are seeking relief will get a resolution...In its most recent update, the department said in January that it had approved borrower-defense claims for more than 28,000 Corinthian students. But few details have been forthcoming since. Toby Merrill, director of the Project on Predatory Student Lending at Harvard University's law school, said the department still has the tools it needs to process those claims even after delaying the new rule. “The department’s processing of all borrower defenses has essentially stopped,” she said. “While that’s not an acceptable state of affairs, that’s the state of affairs they’re facing.”

A single mother of four whose wages are being garnished by the government over student loans she took out to attend a college that’s since been accused of fraud is entitled to a swift answer about whether her loans are eligible to be discharged, a federal court ruled Friday...In the meantime, Dieffenbacher has remained in limbo until the case is resolved, said Toby Merrill, the director of Harvard Law School’s Project on Predatory Student Lending and one of the lawyers representing Dieffenbacher. “She’s had this fraudulent debt hanging over her for more than two years,” Merrill said, adding that Dieffenbacher has taken all of the steps available to her under the law to challenge the debt and get her claims adjudicated, but still hasn’t gotten any clarity.

Millions of U.S. parents have taken out loans from the government to help their children pay for college. Now a crushing bill is coming due. Hundreds of thousands have tumbled into delinquency and default. In the process, many have delayed retirement, put off health expenses and lost portions of Social Security checks and tax refunds to their lender, the federal government...“This credit is being extended on terms that specifically, willfully ignore their ability to repay,” says Toby Merrill of Harvard Law School’s Legal Services Center. “You can’t avoid that we’re targeting high-cost, high-dollar-amount loans to people who we know can’t afford to repay them.”

Last year, an “extremely enthusiastic” charitable nonprofit foundation based in India approached Education Management Corp. with an offer. Hoping to break into the United States, the Ritnand Balved Education Foundation wanted to buy the Pittsburgh for-profit education provider’s two largest art institutes — the New England Institute of Art, in Brookline, Mass., and the Art Institute of New York City — and keep them open as nonprofit institutions, according to letters and emails exchanged between EDMC and Massachusetts education officials...EDMC’s programs “burden graduates with unmanageable student loan debt — programs that will be subject to even less federal oversight once they have been sold to a nonprofit,” said Toby Merrill, an attorney and director of the Project on Predatory Student Lending.

It seems only right that victims of predatory for-profit education companies should have their student loans forgiven. After all, in addition to being left with mountains of debt, former students have worthless degrees from schools that no longer exist, such as those once operated by the defunct Corinthian Colleges or ITT Educational Services. Because taxpayers backed most of these loans, however, the Department of Education has been loath to forgive them. So it was gratifying to see five former ITT students take matters into their own hands this week by petitioning a federal bankruptcy court to consider loan forgiveness as part of the company’s liquidation...on Jan. 3, lawyers at the Project on Predatory Student Lending at Harvard Law School filed to intervene in ITT’s liquidation, which is currently being overseen by James M. Carr, a federal bankruptcy judge in the Southern District of Indiana...“We’re trying all the angles, all the avenues,” Toby Merrill, founder and director of the Harvard project, said in an interview...“All of these students have filed their own claims with the Education Department,” said Eileen Connor, director of litigation at the Harvard project. “But the Department has been sitting on them, and they are not visible in any way.”

As eight years of zigzagging but ultimately valiant efforts by the Obama administration to protect students and taxpayers from predatory for-profit colleges comes to a close, new documents, released to us under the Freedom of Information Act, shed light on a key chapter in that saga: The 2015 demise of one of the most abusive companies in the industry, Corinthian Colleges...Aided by ace lawyers Toby Merrill and Eileen Connor from Harvard Law School’s Project on Predatory Student Lending, Republic Report in September 2015 filed a FOIA request with the U.S. Department of Education seeking, among other things, communications between the Department and Corinthian as the company started to collapse under the weight of government, media, and public scrutiny of its predatory practices.

A U.S. appeals court in New York revived a lawsuit seeking to stop the government from collecting on loans made to students of a nationwide beauty school chain, since it knew the now-defunct company routinely falsified student eligibility for those loans...It is a victory for thousands of borrowers who said Wilfred American Educational Corp victimized them into obtaining loans to attend its roughly 60 for-profit trade schools, popularly known as the Wilfred Academy. The last closed in 1994. Toby Merrill, director of Harvard Law School's Project on Predatory Student Lending, said low-income borrowers like many of the plaintiffs are "primary targets of predatory schools," and often unable to vindicate their rights. "This has been an enormous problem in for-profit trade schools," Merrill, who filed a brief supporting the plaintiffs, said in an interview. "The decision shows that the Department of Education can't sit on those rights."

“The proposal that I have seen erects significant and arbitrary barriers for borrowers who are entitled to relief,” said Toby Merrill, the director of the Project on Predatory Student Lending at Harvard Law School, referring to the Education Department’s proposal. “This would be worse for borrowers.”

A federal judge in Massachusetts this week issued a mixed ruling in a case challenging tougher regulations on for-profit colleges enacted by that state’s attorney general. The Massachusetts attorney general’s office, which has been among the more aggressive in cracking down on for-profit colleges, largely prevailed in the case as the judge upheld seven of the nine state regulations the for-profit college association in the state had challenged...Toby Merrill, who directs the Project on Predatory Student Lending at Harvard Law School and advocated for tougher regulations, said that the ruling was “a substantial vindication” of the rules. She pointed out that although two provisions were invalidated by the court, the for-profit college group did not challenge the underlying authority of the state to create the rules in the first place.

The U.S. government is sitting on a growing pile of debt backed by little more than parental love. That’s because parents can borrow tens of thousands of dollars a year for their kids’ college education without showing they can pay it back. About 3 million parents have $71 billion in loans, contributing to more than $1.2 trillion in federal education debt. As of May 2014, half of the balance was in deferment, racking up interest at annual rates as high as 7.9 percent. “It’s deeply problematic that the federal government is making relatively high-interest loans without thinking about, much less checking, whether the people they’re lending to will be crippled by this debt,” said Toby Merrill, a Harvard Law School lecturer who has counseled defaulted parents through the school’s Project on Predatory Student Lending. “We’re impoverishing the less-privileged population who are aging. That’s a terrible policy.”

In an effort to help borrowers struggling to repay student debt, Attorney General Maura Healey on Tuesday announced a new student loan assistance unit and a crackdown on unlawful debt relief companies...Students and advocates who joined Healey in her office for the announcement also praised the new hotline as a means of providing borrowers with information they otherwise may have difficulty obtaining. “Because access to legal advice is so hard to come by, people essentially are unable to enforce their legal rights, so their legal rights disappear,” said attorney Toby Merrill, the director of Harvard Law School’s Project on Predatory Student Lending.

For all the claims that the $95.5-million settlement, announced on Monday, of a federal false-claims lawsuit against the Education Management Corporation was "historic," "unprecedented," and "a very clear warning to other career colleges out there," the deal actually won’t do a whole lot for the thousands of students who may have been pressured to enroll by the company’s admissions recruiters over the past decade. In fact, some of the biggest financial beneficiaries will be the lawyers for the four sets of whistle-blowers who brought the allegations of "boiler room"-style recruiting to light, beginning in 2007...In exchange for having broken laws, "the company agrees not to break the law going forward? None of this sounds like remedy to me," said Toby Merrill, director of the Project on Predatory Student Lending, at Harvard Law School. "The company has taken billions of federal funding and distributed that to its executives and shareholders," but students will see very little of it, Ms. Merrill said.

Students who claim they were defrauded by for-profit schools owned by Corinthian Colleges Inc. into taking out federal student loans will have to wait several more months before the Obama administration decides whether to cancel their debts, the Department of Education said Thursday...The department has a conflict of interest in deciding whether to cancel borrowers' debts because of its role in making the loans and overseeing schools, said Toby Merrill, the director of the Project on Predatory Student Lending at Harvard Law School. Its surveillance of Corinthian represents "a massive failure in terms of oversight of federal funds and programs funded by [taxpayers]," she said.

Most parents will do just about anything for their children, especially when it comes to education. Predictably, at a time when college costs are exploding and students are staggering under more than $1 trillion in debt, one opportunistic lender is making huge profits on loans to their doting moms and dads. Less predictably, that lender is the United States government...Toby Merrill, who runs a Harvard-affiliated legal services clinic that focuses on predatory lending, recalls one ready-to-retire borrower who contacted her after running up $150,000 in PLUS debt on three children. “The question was: What are my options?” Merrill said. “It was sad, because the answer was: You don’t really have options.”

Last week, one of the country’s biggest career college chains completed its collapse. Corinthian Colleges once ran 107 campuses of Everest Institute, WyoTech and Heald Colleges that served more than 100,000 students. It was a darling of Wall Street for its lucrative model of offering degrees to low-income students who borrowed heavily from the government to pay their tuition...“It is supremely unfair for the government to hold students feet to the fire on loans that were made to finance what the government should have known were valueless products,” said Toby Merrill, director of the Project on Predatory Student Lending at Harvard Law School.

They were searching for a way to help thousands of students nationwide who had been mired in debt by predatory for-profit colleges. And a group of Democratic senators found the solution buried deep in a federal promissory note signed by every student who takes out government loans: the “defense to repayment” provision, a little-known clause that has become a rallying point for lawmakers and activists in the wake of the shutdown of the for-profit giant Corinthian Colleges...“Of course there’s always secret passageways and back doors, but they’re usually not within federal law,” said Toby Merrill, the director of the Project on Predatory Student Lending at Harvard Law School’s Legal Services Center. “It was really surprising that this exists.”

Right now in Massachusetts, for-profit colleges are facing big questions, new regulations and lawsuits. The state attorney general is investigating about 12 of them — amid charges of low graduation rates and deceptive sales tactics that leave too many students mired in debt...But Mike DiGiacomo’s story is just one of many that raises a lot of questions about the for-profit college industry, at a time when it’s facing a lot scrutiny over high rates of debt and low rates of graduation and employment. Guests...Toby Merrill, attorney and senior clinical fellow at the predatory lending practice at the legal services center of Harvard Law School.

The Obama administration is moving to ease access to student loans for parents with damaged credit, a policy reversal that could saddle poor families with piles of debt but also boost college enrollment...Credit counselors say they have seen a rise in borrowers who took out large sums despite being on limited incomes. "This debt will remain a huge problem for the rest of their lives," said Toby Merrill, head of the Project on Predatory Student Lending at Harvard University's Legal Services Center.