An estimated 15,000 defrauded or misled students will see their loans discharged shortly as Dept of Ed responds to a court order.
Washington, DC – Last night, the Department of Education announced its plans to cancel $150 million in student loans for students who qualify for automatic relief because they were attending schools that closed while they were enrolled. More than half of the 15,000 borrowers who will receive immediate relief attended the now-defunct Corinthian Colleges.
This announcement comes on the heels of a court order directing Secretary of Education Betsy DeVos to immediately implement the Borrower Defense rule, an important consumer and student protection that provides relief to students who were defrauded or misled by their institutions of higher education. Secretary DeVos delayed implementation of this rule for more than a year as she worked to weaken the provisions in it that would protect students.
In response to this announcement, Reid Setzer, Director of Government Affairs for Young Invincibles, issued the following statement.
“Today is a turning point for thousands of misled and defrauded student loan borrowers whose lives have been on hold as the DeVos Department of Education fought against the relief that is rightfully theirs. These borrowers can now begin the next chapter of their lives without the weight of their illegitimate debt holding them back.
This should be just the beginning of student debt relief by the Department. There are roughly 100,000 students around the country who have been misled or defrauded by deceptive schools, and the Department of Education owes each of these borrowers a sense of urgency and transparency in processing their closed school discharge and borrower defense claims. This has been the morally correct thing to do all along, and now it is the Department’s legal obligation to carry it out.”