"The Department of Education under Secretary Betsy DeVos is engaged in an effort to undo Obama-era regulations governing loan forgiveness among students who have been defrauded by their universities. While these students represent only a fraction of all Americans with student loan debt, experts say they're among the most vulnerable, and that DeVos' proposed changes would make it more difficult for students to fight back against schools that failed to provide the education they were promised," Bustle reports.
"Under the Obama administration, students who had been defrauded by their universities could apply to have their loans forgiven through a regulation known as borrower defense. Now, the Department of Education is reportedly considering new requirements for students seeking loan forgiveness. The changes include requiring individual students to prove that their colleges had intentionally deceived them, demanding that students meet a higher standard of evidence while proving their claims, and permitting a shorter timeframe in which to do so.
The Department of Education 'came to the table during negotiations with a much stricter proposal in terms what the borrowers have to do,' says Karen McCarthy, the director of policy analysis for the National Association of Student Financial Aid Administrators. She characterized that proposal as the department's 'starting point' in negotiations that will continue next month.
Students of for-profit colleges are at least twice as likely to default on their loans compared with their peers from public schools, according to a report published in October by the National Center for Education Statistics. Back in December, the department issued guidelines specific to former students of Corinthian Colleges, a now-bankrupt collection of for-profit secondary education companies that was shown to have misrepresented its job placement rates to prospective students. Where those students had been entitled to full federal student loan relief during the Obama administration, DeVos announced a new set of criteria for claims: The amount of loan forgiveness will be tied to the students' current earnings.
If a former student of Corinthian Colleges is earning less than 50 percent of the salary of her peers outside Corinthian, she'll be entitled to full loan forgiveness. But if she's making more than the average salary, her loan relief will be determined by her earnings. If she's making anywhere over 50 percent of the average earnings, for example, she'll be eligible to have half of her loans forgiven at most. Some students will have as little as 10 percent of their loans forgiven."
NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.
Publication Date: 1/18/2018