Financial Helpers previously wrote an article a few weeks ago about how a judge put a hold on President Obama’s student loan forgiveness rule. After hearing cases from both sides of the argument, it appears the rule has been greenlighted. Now, students have the protection they’ve long desired.
During the waning months of President Obama’s administration, he put in place student loan forgiveness protections. These protections were designed to allow students to apply to have their loans wiped away. Not just any student loans, but those obtained through fraudulent schools.
Many for-profit schools outright lied and used predatory tactics to attract students. They bragged about their job placement rates and told students they would help them find work. After the students graduated, was later found that these claims were untrue. That’s why Obama put together a plan to prevent students from being suckered.
Pres. Obama called this program a defense for borrowers. It allows student loan forgiveness for student federal loans. The Trump administration did their best to delay this federal rule. Present Trump and Betsy DeVos set out to create their own income tiered program.
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Borrowers Qualify for Student Loan Forgiveness
There are now over 100,000 borrowers who qualify for student loan forgiveness. These students attended for-profit schools that abuse the system. Some of these schools include ITT Tech and Corinthian, who recently went out of business
“We’re really gratified,” said Eileen Connor, the director of litigation at Harvard Law School’s Project on Predatory Student Lending, “These regulations have a lot of critical protections in them for student borrowers and taxpayers.”
http://financialhelpers.com/new-bill-would-encourage-employers-to-pay-off-student-loans/
The new rule was supposed to go into effect July 2017. Just before that happened, education secretary Betsy DeVos decided to do some a little different. She suspended the Obama era rule and implemented her own. The problem is, federal agencies must do things the right way. DeVos didn’t follow the specific procedures for implementing a rule change.
Federal Judge Randolph Moss stated last month that the US education Department did not follow proper procedures. But before putting forward the Obama era rule, he wanted to hear the argument on both sides of the aisle. Prominent Democrat lawmakers, as well as school associations and the for-profit schools, to get a chance to defend their argument.
As a result of this delay, there were many thousands of loan discharge requests for student loan forgiveness waiting for answers. Finally, the judge ruled against DeVos and the Trump administration. Now, with every obstacle out of the way, student loan forgiveness can move forward without delay.
The Fight May Not Be Over
According to Liz Hill, a spokeswoman for the Education Department, the fight isn’t over.
Ms. DeVos “respects the role of the court and accepts the court’s decision. However, Ms. DeVos still hopes to rewrite the rule. The secretary continues to believe the rule promulgated by the previous administration is bad policy, and the department will continue the work of finalizing a rule that protects both borrowers and taxpayers,” Ms. Hill said.
In order to change this rule, the education department must wait until July 2020. Which means students have until then to obtain full student loan forgiveness. As of right now, there are 106,000 claims still pending that were on hold. These legal fights are likely to continue, as even Judge Moss cited in his decision that this is not the last chapter of the fight.
Come back to Financial Helpers to learn more as it develops.
