Senators Push For Mass Student Loan Forgiveness Before Trump Takes Office

Source: Molly Hensley-Clancy, Buzzfeed News, December 19, 2016

Democratic senators are urging the Education Department to rush through tens of thousands of requests for student loan relief in the final weeks of the Obama administration, saying the government should race to clear the debts of students who were defrauded by for-profit colleges before the Trump team takes over. … Illinois senator Dick Durbin says he has repeatedly urged education secretary John King to make debt relief a top priority in the final weeks of his term. “We don’t know how committed the next administration will be to providing federal student loan relief to students defrauded by for-profit colleges,” he said, “but we know that right now there are thousands of students out there who are eligible for this relief under the law and have not gotten it yet.” But no matter how quickly the Education Department moves through the claims from students who say they were defrauded — 80,000 of which have been submitted so far — most are likely to be left on the table when Donald Trump takes office. While much of the Obama administration’s late-term legacy is built on easily-overturned regulatory actions and executive orders, its debt forgiveness efforts are on even shakier foundations. The Education Department chose to prioritize so-called borrower defense claims from for-profit college students who say they were defrauded, but Trump’s administration can simply choose not to deal with them. … The Education Department has approved debt relief for more than 15,000 former students at Corinthian Colleges, who it determined had been defrauded by the for-profit college chain. But it has so far resisted calls from Durbin and other Democrats, like Senator Elizabeth Warren of Massachusetts, to move more agressively, by automatically forgiving such loans without requiring students to submit claims. …

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For-Profit College Ordered To Forgive $24 Million In Student Loans
Source: Molly Hensley-Clancy, Buzzfeed News, September 12, 2016

A large for-profit college company, Bridgepoint Education, has been ordered to forgive $23.5 million in private student loans after lying to students about how much the loans would cost. The Consumer Financial Protection Bureau said Monday that Bridgepoint Education, a publicly traded company in San Diego that owns two universities, had run an illegal lending scheme, encouraging students to fill the gaps in their education funding with costly private loans that the school falsely promised would cost only $25 a month. In reality, the CFPB says, the loans were much more expensive. Bridgepoint, which owns Ashford University in California and University of the Rockies in Colorado, will have to refund all payments made by students on the private loans — about $5 million in refunds and $18 million in discharged debt — in addition to paying an $8 million penalty. … Federal rules say that for-profit colleges can get only 90% of their revenue from federal student loans, a provision meant to keep for-profit colleges from becoming too reliant on taxpayer money. … The Justice Department is also looking into this lending scheme at Bridgepoint. The department said in July that it was investigating whether the company had overstated the amount of money it got from private loan programs, violating the 90/10 rule. …