Student Loan Agencies Win 3rd Dismissal In FCA Suit
Richmond office managing partner John West was mentioned in a January 16 Law360 article about a Virginia federal judge dismissing on summary judgment a long-running False Claims Act suit that alleged the Pennsylvania Higher Education Assistance Agency and Vermont Student Assistance Corp. defrauded the U.S. Department of Education by improperly inflating interest rate subsidies. Per the article, the judge stated the student loan financing agencies are arms of their respective states and immune from FCA suits, which can only be brought against individuals.
“The decision today … affirms for the third time that Vermont Student Assistance Corp. is an instrumentality and agency of the state,” John said. “This type of case may not be brought against state agencies, and the facts are indisputable that VSAC operates as an arm of the state and thus, under the law, is entitled to immunity from this type of claim.”