Is it possible to sue a for profit school of nursing that closed after your attending for 2 years but before you finished a degree and you cannot transfer credits to a new school?

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Is it possible to sue a for profit school of nursing that closed after your attending for 2 years but before you finished a degree and you cannot transfer credits to a new school?

The school, continued to lie to students and tell them there was no threat of losing the accreditation. During registration for the Fall semester of last year, the school announced the closing of the school through emails, signs on doors, and employees.

Asked on May 3, 2017 under Business Law, District of Columbia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

1) If the school  lied to you, as you indicate, causing you to lose or spend money or miss some opportunity (such as to apply or transfer elsewhere), you could sue them: intentionally lying about some material (important) fact, like accreditation or whether they will stay open, is fraud, and fraud provides a basis to recover monetary compansation for what you lost due to the fraud.
Note that a mistake is not fraud: only a knowing misrepresentation or lie. If they thought they could stave off closing and avoid losing acreditation but were wrong, that is unfortunate, but it is not  fraud.
2) While as stated above, you may have grounds to sue the school, that does not let you rescind your loans or be relinquished from them. The lender, which is a 3rd party (not the school) loaned you money in good faith and you entered into a loan agreement (i.e. a contract) with them; what happens between you and the school has no bearing on your obligation to the lender (e.g. you obligation to repay) and does not impair their rights or let you out of the loans.
3) Bear in mind that even if you have grounds to sue the school, if it is was an LLC or corporation, you can only sue the LLC or corporation, not indivicual owners or employees; the business structure shields the owners and employees from liability. And if the LLC or corporation has been dissolved, so there is no own left to sue, or exists but is insolvent (no money), you will not receive anything if you sue, since you can only recover compenation from a still-existing, solvent entity.


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