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Debt relief may be coming for victims of student loan fraud

Washington residents may believe that trade school is the answer to their financial woes. Individuals throughout the country say that they have sought assistance from cosmetology schools and other establishments, all in the hopes of pursuing a more lucrative career after graduating. However, scores of those students never even set foot in a classroom. The reason: The institutions they paid to attend shuttered their doors, making off with thousands in student loan money. Now, victims of this fraud are suffering and in need of debt relief -- all because they were duped by unscrupulous con artists.

In protest, four plaintiffs are seeking debt relief from the federal government through a lawsuit filed in New York. The lawsuit argues that the government should cease collections efforts for the four former cosmetology students, in part because officials knew that their school had a history of falsifying students' loan eligibility. One woman was given loans, for example, even though she did not complete the required tasks that were required for application. The company reportedly received over $400 million in federal loans and grants because of its unscrupulous practices.

Instead of seeking bankruptcy, these victims are looking to receive debt relief from a fair settlement with the government. If the suit is granted class-action status, it could benefit scores of students who were defrauded by that cosmetology school, and it could have wide-reaching effects throughout the nation. A system already exists for students who want to discharge their loans if they were falsely certified for aid; however, few former students know about that program, and debt relief is often slow in coming.

Victims who have been exploited by an unethical educational institution may have legal recourse for student loan debt relief. A Washington attorney may be able to provide additional information about student loan discharge. No one should have to suffer under the weight of thousands of dollars in student loans simply because they were victimized by fraud.

Source: The New York Times, "Suit Seeks Relief for Trade School Students With Years of Debt but No Career" Emily S. Rueb, Feb. 25, 2014

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