Today, the U.S. Department of Education announced that it will be rescinding a 2019 policy it used to determine the amount of loan forgiveness to afford student borrowers who successfully established a defense against repayment of their federal student loans based on the predatory acts of the schools they attended.
Under that policy, the vast majority of student borrowers who established a “borrower defense” received only partial relief from their federal student loan debt. The Department announced that it will provide the maximum loan forgiveness available under current law to borrower defense claims that have been approved to date.
“Today’s announcement is great news for students who have been defrauded by predatory for-profit schools. Students who have been harmed by predatory colleges and universities should not be left saddled with federal student loan debt incurred as a result of the schools’ predatory behavior,” said Adina H. Rosenbaum, an attorney at the Public Citizen Litigation Group. “Under the Department of Education policy adopted by the Trump administration, most students who successfully demonstrated that they had a defense against repayment of their federal student loan debt based on the predatory acts of the schools they attended received only minimal relief. The policy’s methodology bore no relationship to the serious harm suffered by students who were misled or deceived by the schools they attended into amassing student loan debt in exchange for often worthless educations.”
Public Citizen Litigation Group, together with the Project on Predatory Student Lending at Harvard Law School, represents a class of student borrowers in a challenge to the partial relief policy.