JACKSONVILLE, Fla. — Former Florida Coastal School of Law students have been hurrying to request forgiveness of sometimes staggering student loan debts ahead of a court order that could cancel $6 billion in obligations haunting people who attended for-profit schools nationwide.
“My time is now or never,” said Natacha Ciezki, who said that including interest she owes about $500,000 for the law degree she earned in Jacksonville in 2014.
Ciezki, an Army foreign area officer now based in Germany, said she had found little work as an attorney and was moving on with her life when a friend connected her a few weeks ago to a Facebook page where school alumni were talking about debt.
“There were already 1,000 of us and everybody was talking about doing their application,” she said.
The application was for the U.S. Department of Education to cancel loans based on what’s called a “borrower defense” that the schooling students received wasn’t what had been promised.
That’s something that could happen if a federal judge in San Francisco approves a settlement — maybe as soon as Thursday — that Education Department lawyers negotiated in June with lawyers for students in a class-action lawsuit affecting more than a quarter-million people who studied at more than 150 schools.
Florida Coastal, which closed its doors last year, was among the schools where the Education Department agreed to “presumptive relief” for students who had filed borrower defense applications before the settlement was signed June 22.
That presumption, making forgiveness the default response for those applications, was based on “strong indicia regarding substantial misconduct by listed schools … and the high rate of class members with applications,” said a joint motion that lawyers in the class action sent to U.S. District Judge William Alsup for his approval.
The settlement the lawyers drafted covered about 200,000 people nationally who had filed borrower defense applications at 153 schools listed for presumptive relief and either received no answer or got form-letter denials from the Education Department.
Several Northeast Florida schools, grads affected
In addition to Florida Coastal, schools on the settlement list that have operated around Jacksonville (some are closed) include Concorde Career Institute; DeVry University; FastTrain; Florida Career College; Kaplan College; Keller Graduate School of Management; Keiser University; University of Phoenix; and Virginia College. Keiser was a for-profit school years ago but was sold in 2011 to a nonprofit, Everglades College Inc.
Another 68,000 people who had filed borrower defense applications for schools that weren’t on the settlement list won’t be presumed to deserve relief but will get decisions about their loans sometime between six months and 30 months from when the settlement takes effect, the agreement said.
People who don’t receive an answer within 30 months will automatically have their debt canceled.
The lawsuit, originally filed against former Education Secretary Betsy DeVos, had argued the Education Department let huge backlogs of applications grow with no plan for checking into them, even though debts some students took on could have been the result of school operators’ fraud.
“The schools promised high-paying jobs, state-of-the-art vocational training and long and fulfilling careers. These were lies,” lawyers for seven students who filed the original lawsuit in 2019 argued then. “The schools actually delivered worthless products that left students with thousands of dollars in debt, damaged credit and depleted access to further student aid.”
The settlement also pledges that people filing borrower defense applications now will have their claims reviewed and decided within 36 months as long as the requests are made before Alsup approves the settlement. If not, their debts will be canceled, says the agreement.
Familiar stories of debt and failed promises
That pledge has triggered a number of former Florida Coastal students to submit applications before a hearing Alsup scheduled for Thursday afternoon. The students — some working now as attorneys, others not — said they were paying for education and services that often fell short of the school's sales pitches.
“They made promises … [to] kind of incentivize you to go to the school. They said they would help with career development, they would help find jobs,” said Ryan Treulieb, a 2015 graduate who said those promises were empty.
“It took me two and a half, three years to find my first attorney job. … It was very nerve-wracking,” said the St. Augustine resident, who said he owes more than $300,000 for his time in law school, with payments that came due long before anyone hired him.
Treulieb, who works remotely for a South Florida firm representing homeowners whose insurance companies aren’t living up to coverage commitments, said the law school seems to have a weak reputation with big Jacksonville law firms, a thought that other graduates echoed.
Susie Quesenberry, who graduated in 2014, said she was assured there’d be placement and career help available before she left the $60,000-a-year she already had to enter law school. When she was looking for internships or starting her law career, though, she was on her own.
“They did nothing for me. I couldn’t get a call back from Career Services,” said Quesenbery, who opened a solo practice in family law from a spare room in her home after landing jobs that paid less than her old salary.
She said scholarships paid for a lot of her education, but loans and interest due still left her owing about $80,000. She said some graduates have had a harder time, saying one classmate ended up owing hundreds of thousands of dollars and tending bar.
Florida Coastal stopped taking students after the Education Department last year said it was ineligible to receive funding from student loans, a move the department said delivered on a pledge by President Joe Biden to stop for-profit education programs from profiteering off students.
"Too often, we see for-profit schools that try to take advantage of students, misuse taxpayer dollars and skirt the rules to participate in federal student aid programs," Education Secretary Miguel Cardona, who replaced DeVos as a defendant in the class-action lawsuit, said at the time.
Despite the Education Department agreeing to the settlement, it’s uncertain whether the case will be resolved Thursday.
Several school operators, including Everglades College, filed motions last month to intervene in the lawsuit, with Everglades saying it was interested in “protecting its rights and objecting to a ‘settlement’ that is neither lawful nor fair.”
Alsup is scheduled to take up those motions during Thursday’s hearing. If he allows the schools to intervene, they could easily raise other points that will keep the case from being resolved the same day.