It was only a few days ago that Financial Helpers reported on this developing Education Secretary Betsy DeVos story. She, along with the Trump administration, was purposely keeping students from obtaining student loan forgiveness. This is in direct violation of an Obama-era law that offered amnesty in the event of for-profit scams and fraud.
Instead of offering full student loan forgiveness, DeVos was in favor of a tiered program. This program would award differing amounts of loan forgiveness based on their income. If they made more money from their degree, the less they’d have forgiven. Rather than 100% of their loans wiped clean, the average was about 30%.
http://financialhelpers.com/new-partial-student-loan-forgiveness-tiered-program-being-worked-out/
According to the DeVos, it’s unfair for the taxpayers to brunt the full burden of student loan forgiveness laws. However, on Wednesday, a federal judge rebuked the education secretary. It delivers a substantial blow to the Trump administration’s desire to cozy up to financial institutions rather than defrauded students.
The Ruling Against DeVos
Many critics of DeVos argue that she’s a shill for the financial institutions that offer student loans. She brought several big names from for-profit schools onto her staff. It’s easy to see why the Trump administration was in favor of reducing strict regulations that prevented the predatory behavior. Yet, according to a federal judge, they were breaking the law.
According to the judge, DeVos’ actions against delaying rules enacted under President Obama were “arbitrary and capricious.” Attorney Generals from 19 states, all Democrats, filed a lawsuit against DeVos for not following these rules. She defended her actions, saying Obama’s ruling was “a muddled process that’s unfair to students and schools.”
“It’s a really big deal, it’s an incredibly important win for student borrowers and really for anyone who cares about having a government that operates under the rule of law as opposed to as a pawn of industry,” said Toby Merril, a litigator at Harvard University’s Project on Predatory Student Lending.
Actions Towards Student Loan Forgiveness Laws
It’s still unknown how this ruling will impact how the Trump administration will handle student loan forgiveness going forward. They have an appointment later today with the judge to discuss possible remedies. Advocates for students hope the judge restores the Obama rules to ensure they have protection from predators.
Another lawsuit is waiting in the wings to tackle the partial loan forgiveness program again. Until the case is settled, DeVos will most likely be ordered to abide by the current rules. It’s unknown whether Wednesday’s ruling will impact how the Department of Education will handle defrauded student cases moving forward.
