“A careful analysis of these claims and associated evidence has shown that these borrowers have been harmed and we will give them a fresh start,” he added.
The change comes as leading Democrats continue to push President Joe Biden to propose broader debt relief on student loans – the president, in his opinion, believes that this should be left to the discretion of Congress.
Narrow relief for commercial school students
The revised DOE policy is to write off debts to students whose schools have defrauded them, a principle known as “borrower protection.”
The process of forgiveness was simplified during the Obama administration, when it was discovered that large commercial colleges such as Corinthian and ITT Tech were misleading students and closing their doors under pressure from the federal government. For example, schools presented their prospective students with inflated employment figures.
Borrowers initially received 100% loan forgiveness if the Department of Education determined that their school had committed fraud. But DeVos changed the calculation, which resulted in partial debt relief for eligible borrowers based on their current income.
Some Democrats insist on debt forgiveness
Biden’s change of administration does not match the more comprehensive program overhaul called for by defense groups.
“Giving up partial bailouts is a good start for a small group of borrowers, but what we want the Department of Education to do is overhaul the current borrower protection process,” said Toby Merrill, director of the Harvard Predatory Student Loan Project, which is suing DeVos. on issues related to the borrower protection rule.
In a press release, the Ministry of Education called the rule change a “first step” in addressing borrower protection claims and said it intends to take additional action.
But Biden, who said he would support canceling $ 10,000 per borrower, has repeatedly resisted pressure, arguing that the government should not forgive debts to people who went to Harvard, Yale, and Penn.
The department already has several more targeted debt cancellation policies. He writes off debts to defrauded students and disabled veterans. According to the National Student Legal Defense Network, Biden could make the lives of hundreds of thousands of borrowers easier by simply expanding these programs.