DeVos might cut loan forgiveness for students defrauded by for-profit schools

Cheated by a for-profit college but still stuck with federal student loan debt? You might be out of luck — or maybe not. The Department of Education is about to change the rules for loan forgiveness, but it just won’t say how exactly.

According to Education Department officials, who spoke anonymously with the AP because they are not publicly authorized to speak on the in-progress plan, the agency is considering offering only partial loan forgiveness for students who were duped.


They didn’t offer many details available on their new plan, but did signal they might determine how much to forgive by looking at average earnings of graduates from similar programs.

Calls for loan forgiveness intensified in 2016 after the ITT Tech and Corinthian College chains folded amid investigations and lawsuits regarding their predatory lending practices, sketchy accreditation, and overblown claims about job placement post-graduation.

Earlier this year, President Trump himself settled a $25 million lawsuit against Trump University, whose attendees alleged that the president’s namesake real estate seminars mislead them about supposed business secrets they would learn through enrolling.

DeVos, a prominent privatization and charter-school advocate before joining the administration, has signaled for months the rules around for-profit colleges could change.

In June, she froze a number of Education Department policies that the Obama administration had updated to beef up protections for students defrauded by for-profit colleges, prompting an outcry from advocacy groups and a recent lawsuit from 18 states.

“My first priority is to protect students,” said Secretary DeVos at the time in a statement. “Fraud, especially fraud committed by a school, is simply unacceptable. Unfortunately, last year’s rulemaking effort missed an opportunity to get it right. The result is a muddled process that’s unfair to students and schools, and puts taxpayers on the hook for significant costs.”

The Obama-era rules prevented for-profit colleges from asking students to sign away their right to sue, cut funding for for-profit schools that saddled students with loans without preparing them for gainful employment, and shifted more financial responsibility for loans onto the colleges themselves.

Using these protections, tens of thousands of students were able to cancel over $550 million in loans.

Before the freeze, the Department had been reviewing the previous administration’s rules, and to this day, it hasn’t acted on any new claims for loan forgiveness. By the AP’s count, since DeVos took office, the Department has approved any of the 65,000 new requests for loan forgiveness that’ve been filed.

If the new rules go into effect, they will mark the latest in DeVos’ wider efforts to reduce federal involvement in education, which has included pushing for private school choice vouchers, and rolling back federal guidances on disabled students and campus sexual assault in recent months.