Thousands of students who took out federal loans to attend schools that lured them with fraudulent claims will still have to repay a portion of their debts, the Education Department said yesterday — a new attempt to water down a loan-forgiveness program that the department’s leader has long deplored, the New York Times reported. The change creates a complicated sliding scale on which defrauded students’ relief is calculated using group earnings data. Debts will be fully forgiven only if students in a particular program earned far less than those from similar programs at other schools. The policy change will almost certainly be challenged in court by borrowers, who have already beaten back one attempt by DeVos to enact partial forgiveness. DeVos sought in 2017 to reduce the relief offered through the rule known as “borrower defense to repayment,” which allows the former students of schools that broke laws to seek forgiveness of their federal student loans. A federal court blocked that effort, saying the department’s method for determining how much relief to grant applicants illegally misused individual income data obtained from another federal agency. The agency’s new method turns the individual earnings approach on its head. If the department affirms that a school broke state laws or otherwise misled students, it will use government data to calculate the median earnings of students in each program that qualifies for relief. It will measure those figures against the median earnings of students from other programs the Education Department considers comparable. Read more.
DeVos will be testifying before the House Education and Labor Committee at a hearing at 9 a.m. EDT on Thursday titled "Examining the Education Department’s Implementation of Borrower Defense." For more information, please click here.
