Betsy DeVos forced to cancel $150M in student loan debt after judge rules her effort to stop it is illegal
A loss for Betsy DeVos will now result in a major win for thousands of students currently being weighed down by student loan debt.
According to Politico Thursday, U.S. Department of Education announced that it plans to cancel approximately $150 million in loans for borrowers who attended for-profit colleges that have now closed.
The Obama-era borrower defense relief program provided a path for people to seek forgiveness for federal student loans if a school closed or defrauded their students. But the program came to a screeching halt under Education Secretary Betsy Devos with her reportedly calling it a “free money” giveaway.
DeVos was sued for her actions and in September a federal judge ruled that her attempts to keep the regulations from taking effect were illegal. Then in October the same judge issued another ruling that also prevented for-profit colleges from blocking the policy.
According to the Education Department, borrowers whose schools closed are eligible to have their loans discharged as long as they were enrolled at the school when it closed, not enrolled at another Title-IV school within three years of the previous school’s closing and don’t transfer their credits to another institution.
When your chyron leaves out the important part
Chryon: Devos cancels $150 million in student loan debt
Facts behind the story: Devos was *forced* to cancel $150 million in student loan debt after a judge ruled she has to let an *Obama-era program* go into effect pic.twitter.com/55uN6ibHW2
— Lis Power (@LisPower1) December 14, 2018
Approximately 15,000 borrowers will have their loans discharged by the Department of Education under the regulation. Of that group, about 50 percent attended Corinthian Colleges, a for-profit chain that closed in 2015 after filing for bankruptcy. The remaining students attended colleges that closed between November 1, 2013, and Dec. 4, 2018.
The Department of Education began notifying borrowers Friday via email.
“This is a good first step, but it’s not good enough… [DeVos should] abandon her attempts to rewrite the borrower defense rule to let for-profit colleges off the hook and instead fully implement the current rule and provide relief to more than 100,000 borrowers who were cheated out of their education and savings,” Senator Patty Murray, a Democrat from Washington and a member of the Senate Education Committee, said in a statement.
The discharge process will take up to 90 days to complete.
The Education Department said it will cancel $150 million in student loan debt for 15,000 people.
The loans will be forgiven under an Obama-era rule that went into effect in October after a judge ruled against Betsy DeVos's decision to block it. pic.twitter.com/dQqIA8oB2X
— AJ+ (@ajplus) December 14, 2018