There is nothing in the application to have a loan discharged after a school closes that says a leave of absence may not exceed six months in a single year. Yet the department is using the time limit to deny Robert Armour’s request for debt relief.
Armour sued the department and Education Secretary Betsy DeVos in August after his discharge application was rejected. The doctoral student at Argosy took an extended leave of absence from his psychology program to undergo treatment for advanced colon cancer. While Armour was on leave, his campus became part of the first wave of Argosy locations to stop operating. And when the school shuttered, Armour applied to have $100,000 in federal student loans canceled.
The Education Department initially sent Armour a letter stating that he appeared to meet the criteria and that his request was under final review. But the agency ultimately denied his application, claiming that he had withdrawn from the school more than four months before closing — outside the period for loan forgiveness.
Even though Armour was on an approved leave as allowed by the law, the length of his absence exceeded six months. In a November court filing, Justice Department attorneys representing DeVos said the length of Armour’s leave made him ineligible for loan discharge. As a result, the department determined that Armour’s withdrawal date was the last day Armour said he attended classes. And therefore, he stopped being a student outside the four-month window necessary to qualify for loan discharge.
Attorneys for Armour say the time limit the department is using to deny his application — the time limit related to his leave of absence — is unrelated to closed-school discharge. It is typically used to determine when a college must return federal loan and grant aid because of a student withdrawing.
The department said the stipulation is still relevant to closed-school discharge because both rules are part of the Higher Education Act that governs student aid programs.
Education Department spokeswoman Angela Morabito said the agency is trying to resolve the matter.
“The Department … has informed the borrower’s counsel that he may qualify for a total and permanent disability discharge,” she said. “We look forward to working with this borrower to potentially provide the loan discharge that is legally available to him.”
That option would require a physician to deem Armour totally and permanently disabled but would not refund the $34,000 he has already paid on his loans. Armour would be subject to a three-year monitoring period, in which his earnings could not exceed the poverty line or his loans will be reinstated.
“Rob is fighting his cancer and intends to beat it. It’s absurd and insulting that Secretary DeVos is dangling partial relief on the condition that he swear to be totally and permanently disabled,” said Alex Elson, an attorney at the National Student Legal Defense Network, a nonprofit organization representing Armour. “They are asking him to admit defeat, but he intends to fight and to keep living his life to the fullest.”
Armour has struggled to pay more than $1,000 a month on his loans while being treated for cancer. He recently was approved to have his payments postponed while he undergoes treatment.
“I wonder if Betsy DeVos has looked at my case. Does she really believe I should be held responsible for $100,000 of useless debt because my chemotherapy didn’t work fast enough?” Armour said. “I’d like to hope, to believe, that she’s better than that.”
Argosy folded after the Education Department cut off federal student aid in February upon learning that the school used more than $13 million owed to students to cover payroll and other expenses. Dream Center, which owned Argosy, the Art Institutes and South University, was in a financial tailspin at the time. The Los Angeles nonprofit entity spent months trying to close and sell campuses to meet financial obligations but entered into a form of bankruptcy. Dream Center eventually shuttered its schools, leaving thousands of students in the lurch.
“When a giant college fails and destroys thousands of lives, one would hope the government is there to help pick up the pieces, not to pile on to the damage,” Armour said.