Top class action theories
These theories of law are the best bet for any class actions in student loan law:
1. Equal Protection violation; treating SL borrowers differently than others w/o a signifigant govt interest in doing so.
For example, the elimination of any Statute of Limitations for SLs and the denial of a general discharge when filing bankruptcy. The 'its taxpayer money" argument does not fly when foreign nations and large corps get huge amounts of money they never have to repay from our esteemed govt. How about the airlines for starters?
2. Unlawful Bill of Attainder; punishing borrowers w/o benefit of a judicial trial by seizing wages/tax refunds with no meaningful recourse to the courts. Also ties in with Item #4.
3. Involuntary Servitude; forcing a borrower to work to repay their debts. The work is forced by capitalism and society but the repayment is forced by administrative seizures of wages/tax refunds. So either one can not work and be a further burden on society or work and get hit with forced repayment.
4. Due Process violations; these occur frequently when borrowers are subjected to wage and tax refund seizures by collectors of SLs but are denied the required notice and opportunity to respond to these actions in a meaningful manner. Also failure of the govt or its collectors to provide adequate info to borrowers on their debts and the actions it takes. This may not change the law but will certainly slow down the collection process.
an expanded class?
An AP article that appeared in our papers on Friday April 28 noted that wounded military personnel have been hounded for their debts also (leaving things on the battlefield, payroll errors). This leads me to think...maybe "we" could perform a real public service by expanding the class to all victims of third-party collection agents hired by the government---whether the debt is claimed by Ed., Defense, SBA, whichever. My last collector has already volunteered to "help" the IRS...it seems we all may have a common cause here beyond just student loans. Dan
Class Action Remedies
The Higher Education Act of 1964, on which most student loans are based, is not actionable against the Department of Education (DOE) as an agency. It is however actionable against the Secretary of Education personally especially when claiming breech of contract. I believe there needs to be an actionable link using the Fair Debt Collection Practices Act (FDCPA) with futher claims of conspiracy as the FDCPA does not apply to anyone collecting their own debt, only applies to collection companies as described by the statute. The DOE has circumvented their responsibility by providing dunning letters and envelopes promoting false representations by private companies as governmental agencies in contradiction to collection laws. Keep the comments coming-they are all good food for thought.
BrianKelly
"Actionable" as a legal concept
The Higher Education Act imposes many requirements upon the Department of Education which result in potential "actionable" liabilities if the DoE fails to act in compliance. A breach of contract cause of action by a student loan debtor may have merit in a case against a lender, guarantor, or servicer depending upon the facts in the case, but has little likelihood of succeeding against the Secretary of Education as a defendant. The FDCPA is unlikely to provide any basis for a "conspiracy" cause of action. As you correctly state, it only applies to collection agencies. I suggest that you limit your comments to your own experiences rather than making statements that have the appearance of legal opinions. Such statements may be misleading to student loan borrowers.
smoking gun
as stated in my blog, I have an actual FSA letter stating that the payment due date (which keeps changing) mailed to me in a Dept. of Ed. envelope from the National Payment Center in Greenville and completely identified as a DOE billing is in reality controlled by Collectcorp, the collection agency in Arizona that has my account. (And that Collectcorp admitted to DOE it was their mistake, so they admit their role)
How about impersonating government agencies or allowing same?
(send me an e-mail with a mailing address and I'll send you a copy, sinnerschurch@hotmail.com)
Keeping copies including envelopes
You are very smart to keep the dunning letters including the envelopes they came in for future legal action. The Fair Debt Collection Practices Act (FDCPA) prohibits a private compant from representing itself as a government agency. There have been cases won bases on this evidence. There needs to be a link tying in the Department of Education (DOE) to these illegal actions. Would help to have the excuse letter from the collection company stating the letter and envelope were supplied by DOE.
Brian Kelly
a Constitutional issue
How about ex post facto laws, specificied in the Constitution as illegal. The ending of the 10-year deadline that many loans started with would be an ex post facto law. The prohibition is in the Constitution for a good reason: without that prohibition anyone can change the law at any time and then retroactively create offenders--which is what the reforms on the student loans essentially did.
Interesting question
Your observation regarding applicability of the ex post facto prohibition is under consideration.
class action theories
I'm not an attorney so this may or may not be usable, but I think #1 below is a go and #2 is arguable but good luck. (Ties in with due process on the original list, though)
1. Negligent supervision: The Education websites specifically claim that they are supervising collections, thus a tie is admitted before you even go to court (so way ahead of grounds used to sue churches with ratty volunteers--and those are routinely won on these grounds). Any collector using governmental permission is an agent and subjects the Federal government to exposure to liability.
2. Constitutional---telephone collection, "misplacing" numbers and all effectively denies the right to consult legal counsel.
Good suggestions
Supervisory negligence of government actors in general may be actionable. The following partial list of supervisory negligence-based causes of action are a modification of the list prepared by Dr. Tom O'Connor and Dr. Paula Baker at North Carolina Wesleyan College (these are a modification of the list available at: http://faculty.ncwc.edu/toconnor/205/205lect12.htm). The relative applicability of each element varies within the context of federal government liability for harms to student loan borrowers resulting from direct government action or the actions of private agencies acting on behalf of the government, but they do provide a basis for consideration of the breadth of potential liability regarding supervisory negligence related to government employees as well as private agencies.
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Negligent hiring -- hiring persons unfit for the position; not conducting psychological exams; not conducting full background checks
Negligent supervision -- inadequate monitoring of employee performance; failure to reprimand when appropriate; tolerating sloppy work; hearing rumors & not acting; being new to supervisor job
Negligent retention -- keeping employees on the job or promoting them on the basis of favoritism or friendship when they clearly should have been severely disciplined, demoted, or dismissed
Failure to train -- inadequately preparing employees to perform their duties; minimal or ineffective training; little or no in-service training; no educational tuition reimbursement
Negligent entrustment -- inadequately preparing employees prior to entrusting them with responsibilities; a synergistic combination of failure to train and negligent supervision
Negligent assignment -- assigning known problem employees to critical or inappropriate duties
Failure to direct -- not providing clear, articulated guidance in how to perform duties; not having policies and procedures; having agents "sign off" on policies and procedures without understanding them
Failure to discipline -- not having an effective discipline process; not following progressive discipline principles
Failure to investigate -- not having effective investigations unit, inspections or integrity checks, a difficult (for citizens) complaint process, or a difficult (for employees) grievance process
Failure to protect -- protection of the public is an individual liability addressed with failure to direct for supervisors or writ of mandamus
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a sample of oversight
Just got copies of what the Education oversight people asked for and got with regard to collector's actions. Basically it is just asking the collectors to explain themselves and then accepting what they say as being true. The matter dropped at Ed after they got replies that were just plain wrong. (I only got to see the documents because of my own complaint against the collection agency).
several possibilities on this list
Thanks for a complete list. DOE in relation to my latest collection agency is open to action on the grounds of negligence on grounds of supervision, retention (actually colluding with them on the illegal stuff--including falsifying documents),discipline, investigate and protect (responding to illegal calls to me by asking me to call them!). All is documented and I'm willing to go public.
Slavery indeed!
We've been working on your items numbered 1, 2, and 4 prior to your post, and your comments are useful and appreciated. Any thoughts other people might have will be of significant interest to us (just click on the "comment" link at the bottom of any post to reply). Although we find the concept of involuntary servitude functionally and conceptually accurate, we are unfortunately unaware of any legal precedents upon which we could rely. It certainly would be an interesting cause of action within a multi-count complaint...
Grounds for class action suit
What about just plain discrimination.
When the laws were first inacted for student loans, they implied and thus imposed the stereotype that student loan borrowers would not pay their loans back.
This motivated the Congress to pass such stringent laws. Is not that the same as saying "all blacks are violent" or "all jews are rich" that creates discrimination in the first place. To single out a particular part of the society and to pass laws on judgements not accurate, but perceived. Also too,
what about statue limits. Is the lack of, not unconstitutional?
Discrimination as a class action theory...
... is not likely to be a successful cause of action because the federal and state discrimination prohibition statutes are based upon membership in articulated categories. Race, color, national origin, religion, gender, age (40 and older), and disability are fundamental categories defined within the federal anti-discrimination landscape. "Student loan borrower" is, however unfortunately, not a protected category within any of the federal or state anti-discrimination statutes. I'm not aware of any federal Constitutional provision that would render the elimination of statutes of limitation on the collection of student loan debt unconstitutional per se. If anyone has any alternative interpretations of the Constitution on this point, do let us know. Our stronger arguments (subject to further analysis and revision) related to the context of your post appear to be based upon the Constitutional guarantee of equal treatment under the law, applicable to the federal government under case precedent interpreting the Constitution's guarantee that citizens cannot be deprived of life, liberty, or property without due process of law. This analysis would appear to arguably be applicable to many of the circumstances in which student loan borrowers are subjected to disparate treatment under statutes (e.g., bankruptcy, and statutes of limitations) and regulations, as well as the disparate enforcement of statutes and regulations that do not facially reflect unequal treatment in their provisions.
pollyrobin,
I agree completely! I was just thinking about this recently. I have
told family members about the strict laws regarding student loans and
they do not believe me! The undue hardship banktuptcy law is a fantasy
and the only way to even remotely get it is to be on life support!
Thanks for posting what has been on mind too!