Government to rewrite rules for student loan forgiveness

Paterniano Del Favero
Giugno 15, 2017

The Trump administration will announce on Wednesday that it will rollback Obama-era rules devised to close for-profit colleges that are said to leave students with high debt and little job opportunities, according to the Wall Street Journal. As Washington's chief law enforcement officer, I have worked tirelessly to protect student loan borrowers, and I strongly support the revised rules that were set to take effect on July 1.

The regulations, put in place previous year, allow borrowers who have been deceived by their schools or are attending institutions that state attorneys general have taken enforcement action against to seek loan forgiveness.

"The result is a muddled process that's unfair to students and schools, and puts taxpayers on the hook for significant costs", DeVos said.

DeVos said she would also seek to redo a "gainful employment" rule that was meant to help students avoid enrolling in and taking out student loans for career colleges that consistently fail to deliver on promises of job security and high salaries for graduates.

U.S. Senator Joe Manchin (D-WV) questioned U.S. Secretary of Education Betsy Devos today when she testified in front of the Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies on the Department of Education's FY 2018 budget.

The California Association of Private Postsecondary Schools, a trade group, is challenging the rules, arguing that they make it too easy for students to claim fraud so that they can get their loans discharged and that the rules would harm the industry.

The department noted that while negotiated rulemaking occurs, applications for student debt relief will still be processed under the current borrower defense rules.

Eight states and the District of Columbia filed a motion in federal court Tuesday seeking to retain the rules.

"This is a betrayal of students and families across the country who are drowning in unaffordable debt", Healey said in a statement. Almost 4,500 American Career Institute students in MA have qualified for federal loan forgiveness of $30 million of debt.

Back in April, the AGs from dozens of states sent letters to former students of defunct for-profit college chain Corinthian Colleges reminding them to apply for federal student loan discharges. The Department intends to develop fair, effective and improved regulations to protect individual borrowers from fraud, ensure accountability across institutions of higher education and protect taxpayers.

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