Education Secretary Betsy DeVos is pushing ahead on her plans to cancel only a portion of loans taken out by defrauded college students, even amid legal setbacks and as House Democrats prepare to grill her during a hearing next week.
DeVos in recent weeks directed the Education Department to carry out a new policy that will provide partial loan forgiveness to many borrowers whom the agency determines were duped or cheated by their colleges, according to an internal memo obtained by POLITICO.
The memo, which was signed by DeVos in mid-November and hasn’t been reported previously, instructs department officials to resume issuing decisions on some of the roughly 227,000 pending applications filed by borrowers seeking debt relief based on their colleges’ alleged misconduct. That process has been stalled for the past 18 months.
Department officials now plan to move ahead adjudicating those claims — most of which allege fraud at for-profit schools like Corinthian Colleges and ITT Tech — by using a new formula. It calculates loan forgiveness based on how much a defrauded student’s “estimated earnings” differed from those of students who attended similar programs across the country.