The U.S. Department of Education has two quite different roles in the lives of indebted former students: The same bureaucracy that must safeguard taxpayer dollars by collecting $1.1 trillion in loans also oversees the nation's largest-ever effort to forgive student debt, Bloomberg News reported yesterday. These dual roles have culminated in a strange situation. The Obama administration has repeatedly promised that borrowers eligible to have their student loans cancelled would be reimbursed for "every penny." But for months, the Education Department has been actively working to collect on federal student debt owed by tens of thousands of former students at Corinthian Colleges Inc., which filed for bankruptcy in 2015 under a cloud of fraud investigations. It is clear that government officials, working under their own guidelines, have reason to believe at least some of these same debts should be forgiven. The government stands to gain from muscular collection tactics. Not all former Corinthian students are eligible to have their debt cancelled. But eliminating the debt of those who are could cost the federal government nearly $4 billion, according to Education Department estimates. Read more.
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