If you had student loans from a for-profit college that defrauded you, leaving you with debt and a worthless degree or no degree at all, you had a decent chance of having your loans forgiven under President Barack Obama. But the indications coming from Donald Trump’s education secretary, Betsy DeVos, are that if you have student loans from a for-profit college that defrauded you … tough luck. DeVos is considering only partial repayment of the loans.
A federal regulation known as borrower defense allows students at for-profit colleges and other vocational programs to have their loans forgiven if it is determined that the students were defrauded by the schools. That rule dates to the early 1990s. But it was little used until the demise of Corinthian and ITT for-profit chains in recent years caused tens of thousands of students to request that the government cancel their loans.
In the last few months of the Obama administration, the Education Department updated the rule to add protections for students, shift more financial responsibility onto the schools and prevent schools from having students sign away their right to sue a school.
That change was set to take effect in July, but DeVos has frozen it and is working on a new version. She argued that the Obama regulation was too broad and could cancel the loans of some students without a sound basis.
It’s like a refrain from DeVos. The rules governing treatment of campus rape and students with disabilities and student loan repayment were all just too broad or too vague or too-some-other-damn-thing and the only solution for it was for DeVos, with her years of expertise in education absolutely zero experience in education, to freeze them all.
In this case, there are more than 65,000 applications for loan forgiveness pending, and DeVos has not taken action on a single one of them. So if you applied under Obama, your loan may have been forgiven. But if you didn’t learn about the program until later or didn’t manage to complete your application until DeVos’ reign of error began, you’re stuck waiting to find out just how screwed you are. As Eileen Connor of Harvard University’s Project on Predatory Student Lending put it, “It is completely unfair that a happenstance of timing is going to mean that one student who’s been defrauded is going to have full cancellation and the next is not.”
Then again, this is Betsy DeVos we’re talking about. “Completely unfair” could be the Education Department’s new slogan.