A new lawsuit says it’s too hard to cancel student loans.
Here’s what you need to know.
New Lawsuit
Student loan advocates filed a new lawsuit today that says the U.S. Department of Education, led by Secretary Betsy DeVos, is making it harder for borrowers to cancel their student loans. According to the lawsuit, which was filed in U.S. District Court in New York, defrauded students seeking to assert their legal rights to cancel student loans now have to face “onerous standards” and “procedural hurdles.”
What Happened?
Under federal law, borrowers can seek cancellation of their federal student loans if they attended a school that engaged in misconduct or closed suddenly. In 2016, the Obama administration issued new rules to protect student borrowers and federal taxpayers. The lawsuit claims that DeVos attempted to block those rules three times, thereby harming student loan borrowers. In 2019, the Education Department issued a new rule, and DeVos said then: “Despite the mess we inherited from the previous administration, we committed from day one to getting this right for students and taxpayers.