The U.S. Education Department has proposed new changes to rules enacted during the Obama-era that offer debt relief to students who were defrauded by colleges and universities.
Under the government program called the Borrower Defense to Repayment, students who attended a school that misled them or engaged misconduct can get relief from their federal student loans. The rules that govern this program were enacted in 2016, after a series of high-profile cases involving for-profit colleges.
However conservative critics have argued that the program’s regulations are too broad and let too many students seek relief. According to Mary Clare Amselem, a policy analyst from the conservative Heritage Foundation, “Basically, any students could raise their hand and qualify for free money.” As she explains, when a colleges misbehaves and a student’s loan are forgiven, the taxpayers get stuck paying for the bill. Amselem says, “Shrinking the budget that goes towards Borrower Defense is definitely a good thing for American taxpayers."
Estimates provided by The Education Department indicate that the 2016 regulations would cost the federal government around $14.9 billion over the next ten years.
Under the changes proposed by Education Secretary Betsy DeVos, students seeking debt forgiveness will have to prove that schools intentionally meant to harm them with misleading advertising, a reckless disregard for the truth, or financial harm.
Opponents of the new changes say they place too much of a burden on students who are drowning in debt. Ashley Harrington, a lawyer at the Center for Responsible Lending says, “It puts so much responsibility on students and students alone, and on no other piece of this puzzle."
Harrington was part of the negotiations for this new rule and says that during the negotiations, she saw for-profit lawyers make a number of suggestions, many of which were included in the new rules. Harrington says, “This new version reads like a road map for how for-profits can continue to behave badly and avoid accountability.”
According to research conducted by the think tank The Century Foundation, 98.6% of the nearly 100,000 students who filed for borrower defense claimed they were misled by for-profit schools. The research also revealed that veterans and low-income students were especially at risk.
Secretary DeVos released a statement that says, “Our commitment and our focus has been and remains on protecting students from fraud.” She claims the new regulations will set out clear rules for this commitment.
Student advocacy groups fear that these new rules will be so strict that few will be able to qualify.
Get Debt Relief Today
At Atlas Consumer Law, our skilled lawyers are here to help consumers obtain the justice they deserve. If you were misled by your college and are now struggling with your student loans, then call us today. Our team can review your case and determine a legal strategy that will allow you to seek debt relief. Let us fight for you.