Strayer University Lawsuits and Borrower Defense Claims: FTC Warning

Strayer University lawsuits and federal claims currently center on roughly 1,900 borrower defense to repayment applications pending with the U.S. Department of Education, alongside a smaller set of individual employment and contract suits, a 2016 civil rights resolution, and a 2021 Federal Trade Commission warning notice. The university remains accredited and eligible for federal student aid.

The 1,900 Borrower Defense Claims

The largest legal exposure facing Strayer is a batch of approximately 1,900 borrower defense to repayment applications filed with the Department of Education between June 23, 2022, and November 15, 2022. Strayer’s parent company, Strategic Education, Inc., was notified of the claims on February 1, 2024, and later received about 1,850 of them in weekly batches of 500.¹

The Department had not conducted any substantive review of the claims at the time of notification and told Strayer it was not required to respond, with “no negative inference” if it stayed silent. Strayer chose to respond to the applications it received anyway. As of mid-2024, no rulings had been issued, and the company said it could not predict whether the Department would grant relief or try to recoup funds from the university. The Department indicated it would notify Strayer only if a claim was approved and the government decided to pursue recoupment.¹

How Borrower Defense Works for Strayer Students

Borrower defense to repayment lets federal student loan borrowers ask the Department of Education to discharge their loans if they believe their school engaged in certain misconduct. The recognized grounds include misrepresentations about program costs, job placement, transfer credits, or the value of a degree.¹ A former Strayer student who believes any of that applies to their enrollment can file a claim directly with the Department; the pending batch shows the process is active for this institution.

Individual Lawsuits Against Strayer

A former quality assurance specialist and adjunct instructor, Starsha Monet Sewell, sued Strayer in the U.S. District Court for the District of Maryland, alleging race, color, and gender discrimination and retaliation under Title VII and 42 U.S.C. § 1981. Sewell said her supervisor stripped her of adjunct teaching duties in March 2008, cutting her pay from $78,000 to $60,000, and that her August 2008 firing was retaliation for an October 2007 internal complaint and a March 2008 EEOC charge. She also alleged Strayer gave negative references to prospective employers.²

Chief Judge Deborah K. Chasanow dismissed the case in 2013. The Title VII discrimination claims failed because Sewell’s EEOC charge had raised only retaliation, and the retaliation claims about the termination and references were time-barred. Her motion for the judge’s recusal was denied for lack of evidence of bias.²

A more recent case, Hardy v. Strayer University, LLC (No. 6:25-cv-01136), was filed in Orange County, Florida in January 2025 and removed to the U.S. District Court for the Middle District of Florida. Plaintiff Lenorris Eugene Hardy, Sr. alleges Strayer broke agreements about adjusting his grades after a 2016 academic probation.³ Hardy says he entered two agreements with university staff over his academic standing and graduation requirements, and that although he graduated in 2020, the grades he was promised were never awarded, blocking him from law school admission.⁴ His motion to remand to state court was denied, as was a sanctions motion. Appellate mandates were received in December 2025.

Civil Rights Finding and FTC Warning

In 2015, the Department of Education’s Office for Civil Rights investigated a complaint alleging Strayer expelled a student on January 7, 2015 on the basis of a perceived disability, and then conditioned readmission on completion of a course of treatment. OCR found the university had failed to conduct an individualized assessment before expelling the student or setting conditions for his return. Strayer signed a resolution agreement on January 28, 2016, which OCR said it would monitor, reserving the right to reopen the complaint for noncompliance.⁵

In October 2021, Strayer and its sister institution Capella University each received a notice from the Federal Trade Commission under its Penalty Offense Authority, warning the schools about potentially unfair or deceptive marketing practices, including misrepresentations about employment outcomes. The FTC said the notice itself did not reflect any finding that either school had engaged in deceptive conduct.⁶

Accreditation and Federal Aid Status

Despite the pending claims and past regulatory actions, Strayer remains in good standing with its accreditor and the federal government. The Middle States Commission on Higher Education reaffirmed the university’s accreditation on March 12, 2026, and its records show no formal sanctions, probation, or show-cause orders against the school.⁷

In December 2021, Strayer signed a new Program Participation Agreement with the Department of Education granting full certification to participate in Title IV federal student aid programs through September 30, 2025.⁶ Strategic Education reports no debt and a Department of Education financial composite score of 1.9.⁸

1
SEC.gov. Strategic Education Inc. 10-Q, Period Ended June 30, 2024
2
Justia. Sewell v. Strayer University, No. 8:2012cv02927
3
CourtListener. Hardy v. Strayer University, LLC, Docket
4
Midpage. Hardy v. Strayer University, LLC
5
U.S. Department of Education. OCR Complaint No. 11-15-2217, Letter of Findings
6
SEC.gov. Strategic Education Inc. 10-K, Period Ended December 31, 2021
7
MSCHE. Strayer University Statement of Accreditation Status
8
Strategic Education, Inc. 2025 Annual Report