DeVos is Again Delaying Student Loan Forgiveness

student loan forgiveness

Education Secretary Betsy DeVos is at it again. Despite losing a lawsuit last month forcing her hand, she still not following the judge’s orders. She was supposed to uphold the law offering student loan forgiveness to students who were defrauded. Instead, she still collecting these loan payments and not providing the assistance students need.

Now, she’s being sued yet again by the Housing and Economic Rights Advocates (or HERA). The California-based student rights advocate who’s making the claim that DeVos is ignoring the judge’s ruling. DeVos was supposed to start issuing student loan forgiveness immediately but hasn’t.

There are thousands of borrowers who attended for-profit schools that used predatory tactics to get them to sign up. That’s why the Obama administration created the Borrower Defense Rule to allow students to fraud by the schools to receive student loan forgiveness. That was until the Trump administration took over and wanted to do things a different way.

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Previous Student Loan Forgiveness Lawsuit

President Trump and Betsy DeVos didn’t want to offer full student loan forgiveness. Instead, they wanted to base decisions upon the income of each student. Their argument was that it wasn’t fair for taxpayers to fit the bill of people who still got a degree and a job with that degree. Still, their idea flew in the face of a previous law.

19 states and the District of Columbia went into action. The Attorney General in those 19 states banded together to take DeVos to court to force her into offering full student loan forgiveness. This borrower protection program was supposed to take place starting on July 1st. Students who went to 1,400 now-defunct campuses are eligible for forgiveness.

According to the lawsuit:

Students should receive complete and in full student loan forgiveness. They should no longer have to pay back loans, principal, or collection costs after their campus closes. They should also receive a refund for any payments that they’ve made towards their loan. This includes wage garnishments and refund offsets.

Plaintiffs are also asking that students be eligible to once again receive Pell grants. They should clear any credit issues as a result of this problem. Students have been going through these problems for years and the government has done nothing to step up and help them.

DeVos isn’t Playing Ball

DeVos, of course, disagrees with the ruling. She says that the borrower defense is both unfair to students and schools. She also claims that is confusing. Critics of this administration claim that DeVos is in the pocket of the big for-profit college industries. In fact, she pointed many CEOs of these for-profit schools when she was nominated education secretary.

“Fraud, especially fraud committed by a school, is simply unacceptable,” DeVos said in a statement in June. “Unfortunately, last year’s rulemaking effort missed an opportunity to get it right. The result is a muddled process that’s unfair to students and schools, and puts taxpayers on the hook for significant costs.”

Her goal is to create a program that’s fair for both the students and the schools. No one wants to deny students taken by predatory practices, but loans must be paid back. If you got a degree, should taxpayers’ foot the bill? DeVos is in favor of a new program that would cancel only a portion of the students that.

This portion would be based upon the income of students who graduated with the same degree. To her, this is a fair compromise. The education department claims this would save $12.7 billion over the next decade. But it goes against the borrower’s defense rule that is law. The law states that students are eligible for full student loan forgiveness.

The question now remains what the Trump administration will do going forward. It’s apparent they are against student loan forgiveness. They attempted to cut it out of last year’s budget. We’ll keep you apprised of any new developments.

Last modified: January 14, 2019