Trump Administration Leaves Thousands of Students Hanging Over Loan Forgiveness
Five months ago, a federal court ordered the Department of Education and Secretary Betsy DeVos to provide defrauded students loan relief under a 2016 Obama-era rule. But more than 100,000 people are still waiting for action to be taken, as CNN reported.
The rule, called Borrower Defense to Repayment, was introduced in 2016 after for-profit Corinthian Colleges collapsed. Students who could show that they had been defrauded under state law—that the education promised wasn’t what the school delivered or that the school mislead them, perhaps by inflated job placement numbers—could petition for a discharge of federal student loans they had taken out.
In 2017, shortly before the rule was to go into effect, the DOE delayed implementation and said that it was going to change the rule to create a uniform standard and to allow schools to respond. In the process, students were left in limbo.
A federal judge ruled in September 2018 that the DOE delay was unlawful. However, since that ruling, there are no indications that the Trump administration has taken any action to rectify the situation.
It is difficult to say exactly how many students are still waiting for action. CNN’s count notes that more than 200,000 people, most of whom had attended for-profit schools, had applied for loan forgiveness by the fall of 2018. Of them, almost 48,000 received relief and 9,000 were denied. That could leave close to 150,000 waiting and doesn’t take into account other applications that have come in since then.
During all this, the Trump administration has proposed changes in federal student loans, including a reduction in the number of repayment options and a cap on the amount parents and graduate students could borrow.