U.S. to Help Remove Debt Burden for Students Defrauded by For-Profit Chain

"Nearly 25 years after a nationwide chain of beauty and secretarial schools was closed for defrauding students, the Department of Education has agreed to help victims wipe clean their burdensome federal student loan debts," The New York Times reports.
 
"More than 36,000 students — mostly low-income, immigrant women — who attended schools run by Wilfred American Educational Corporation could potentially be affected by the settlement, which was approved by a federal court judge on Tuesday.
 
'The department has been collecting on these loans for decades, including by garnishing wages and intercepting income tax refunds,' said Jane Greengold Stevens, the director of litigation at New York Legal Assistance Group, a nonprofit representing the former students. 'Finally, by entering this settlement, the department is providing the students an opportunity to get out from under the burden of these loans.'
 
The case underscores how long the federal government has been wrestling with the issue of corrupt for-profit vocational schools that deceive vulnerable and poor students about the costs of training programs and the prospect of landing jobs. Even as this decades-old case is being resolved, Education Department officials, attorneys general, lawmakers, advocates and former students are battling over more recent cases involving the erasure of billions of additional dollars in federally guaranteed loans that were taken out by students who were defrauded."
 
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Publication Date: 8/11/2017

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