Department of Education Student Loan Defense

Our client, a dentist, being sued by the Department of Justice (DOJ) on behalf of the Department of Education (DOE) in the Eastern District of New York in federal court in regards to federal student loans he purportedly took in the 1980's. The Department of Justice often sues on behalf of the Department of Education for older defaulted federal loans. This is a very tricky and often times, a very scary situation for Defendants as they are served with process for a case in federal court where the DOJ is the Plaintiff.

Sometimes the Department of Education contracts these cases out and one law firm we have also seen sue on their behalf is Mullen and Iannerone. Such cases are especially significant for doctor and dentist Defendants because a judgment against them regarding such loans can have devastating effects upon their business as it may make them ineligible to accept Medicaid, Medicare and other government insurance policies. In this case our client was put on their "black list" and was unable to accept Medicaid/Medicare payments. Being on the black list can also mean that the medical license can be removed by the State who issued it.

In this case, Lebedin Kofman was retained after a motion for summary judgment was filed by the DOJ. If that motion was granted, the Plaintiffs would have won and a judgment for the full demanded amount would have been secured against the Defendant. After thoroughly reviewing similar cases in many other jurisdictions, we were not able to locate any Defendants who survived summary judgment. Finding a novel issue, Lebedin Kofman filed its opposition to summary judgment. The district judge reviewed our opposition, immediately removed it from being heard and sent it to mandatory mediation. We were able to successfully use this to leverage a negotiated out-of-court settlement for our client whereby he saved over $100,000 and established a three year re-payment plan for him in addition to him avoiding a judgment being filed against him.

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