Betsy DeVos Cancels $150 Million in Federal Student Loan Debt!

Dear Commons Community,

The US Department of Education announced yesterday that it would be canceling $150 million in federal loan debt to students who were defrauded by for-profit colleges.  As reported by The Chronicle of Higher Education.

“Some 15,000 student-loan borrowers whose colleges either shut down or defrauded them are getting good news this holiday season, courtesy of the Obama administration.

The Trump administration’s Education Department announced on Thursday that it would begin notifying the borrowers today that it is canceling about $150 million in federal loan debt, with about $80 million of that sum owed by students who attended the now-defunct Corinthian Colleges Inc. The action sets in motion the Obama administration’s “borrower defense” rule, released in 2016 to provide debt relief to students victimized by predatory colleges.

Education Secretary Betsy DeVos had frozen the rule while she wrote new regulations that would make it harder for students who had been defrauded to discharge their loans. She argued that taxpayers would unfairly foot the bill. But a federal judge decided that the Education Department’s delays were illegal, and in October the same judge denied a request by for-profit colleges to postpone the rule. 

U.S. Sen. Patty Murray of Washington state, the top Democrat on the Senate education committee, issued a statement on Thursday calling the Education Department’s action “a good first step” but one that nonetheless falls short of what is needed to help defrauded students.

“It’s disappointing that it took a court order to get Secretary DeVos to begin providing debt relief to students left in the lurch by predatory for-profit colleges,” Murray said, “but I am pleased the Department has finally started implementing this rule and that some of the borrowers who attended schools like Corinthian Colleges and ITT Tech are finally getting their loans cancelled.”

Murray called on DeVos to “abandon her attempts to rewrite the borrower defense rule to let for-profit colleges off the hook and instead fully implement the current rule and provide relief to more than 100,000 borrowers who were cheated out of their education and savings.”

Better late than never!



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