Betsy DeVos has made loan relief more difficult for defrauded students

The DOE's announcement was criticised by the advocacy groups who said that the students should not be held responsible for the loans when they were cheated by the for-profit organizations.

Betsy DeVos has made loan relief more difficult for defrauded students

Secretary of Education Betsy DeVos on Wednesday announced that the education department is changing the Obama administration's vow to completely erase loans taken out by students defrauded by the Corinthian Colleges chain. This means that the students who were swindled by for-profit college loan programs may face even more difficulties in getting their debts forgiven.

Reports state that the new policy will affect more than 20,000 pending debt relief claims. According to the Associated Press, those students who will not witness the full forgiveness of their debt are the ones who applied for refunds after President Donald Trump assumed office on January 20, 2017. The students whose claims were approved in full under the Obama administration will receive their money. 

Betsy DeVos speaks about a donation from President Donald Trump to the Department of Education (Getty Images)

DeVos said that under the new terms, students' income will be tied to their loan forgiveness. The new standards will determine whether the defrauded students enjoyed some benefit from their education, despite being deceived about their diplomas' worth. 

"No fraud is acceptable, and students deserve relief if the school they attended acted dishonestly,” DeVos said in a statement on Wednesday.

“This improved process will allow claims to be adjudicated quickly and harmed students to be treated fairly,” she added. DeVos also said the introduction of it “also protects taxpayers from being forced to shoulder massive costs that may be unjustified.”

Education secretary Betsy DeVos with President Donald Trump (Getty Images)

The Department of Education (DOE) said that those students who are currently earning less than half the income of their peers from a "passing gainful employment program" will get full loan relief. However, those students who are earning as much or more than the students who completed a similar schooling will receive "proportionally tiered relief," according to Newsweek reports.

 



The government released a loan relief table on Wednesday for the defrauded students, which stated that the student affected by the scam but making 70 percent of a peer's income would get a mere 30 percent loan relief.

The DOE's announcement was criticized by the advocacy groups who said that the students should not be held responsible for the loans when they were cheated by the for-profit organizations about job-placement rates. The groups said that the decision taken by the DOE was wrong and that the affected students should be relieved of their debt.

Students protesting education loan debts (Getty Images)

The Project on Predatory Student Lending at the Legal Services Center at Harvard Law School tweeted on Wednesday saying: "It is unlawful for @usedgov to collect Corinthian debt it already determined was fraudulent. #4profit borrowers deserve justice."

DeVos has been under pressure to clear the backlog of loan forgiveness applications from former students of the Corinthian network. California and Massachusetts have sued the DOE and DeVos for not discharging the loans of the defrauded students. 

Students protesting education debts (Getty images)

Corinthian Colleges, Inc. (CCi) was an expansive, for-profit post-secondary education company in North America. Its subsidiaries offered varied career-oriented diploma and degree programs in several sectors including healthcare, business, criminal justice and information technology. The network shut down all its colleges in 2015, which affected more than 16,000 students and employees.

DOE's inspector general, on December 9, had issued a report calling on the office of Federal Student Aid to start working on thousands of applications which have been stalled.

 



 The DOE officials, so far, have said that the agency has approved nearly 12,900 claims and has denied around 8,600. 

 

 

 

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