Cardona scraps DeVos plan to give partial debt relief to students defrauded by colleges – The Washington Post
An estimated 72,000 people will get full federal loan cancellation after the Education Department’s move
About 72,000 people will have their federal loans fully canceled after Education Secretary Miguel Cardona on Thursday scrapped a plan to give partial debt relief to students defrauded by their colleges, ending a controversial policy instituted by his predecessor Betsy DeVos.
The move — Cardona’s first major higher education announcement since being confirmed — amounts to roughly $1 billion in debt relief. But it only addresses a subset of the nearly 200,000 people who have filed claims in the last six years under a statute known as “borrower defense to repayment.”
“Borrowers deserve a simplified and fair path to relief when they have been harmed by their institution’s misconduct,” Cardona said in a statement. “A close review of these claims and the associated evidence showed these borrowers have been harmed and we will grant them a fresh start from their debt.”
Students are entitled to a discharge of their debt when their college uses illegal and deceptive tactics to persuade them to borrow, but the Trump administration tried to limit that relief.
DeVos created a methodology for processing claims that compared median earnings of graduates who have made debt relief claims with those of graduates from comparable programs. The bigger the difference, the more relief an applicant will receive.