Students Defrauded By For-Profit Colleges Will Get Their Entire Student Loan Debt Erased

education secretary miguel cardona student loan debt forgiveness

If you’re a student who was defrauded by a for-profit college, there’s good news for you: You will have your federal school loans eliminated, according to the U.S. Department of Education.

An Axios story that came out Friday broke the good news. It noted that the “debts of students whose claims were already approved will be erased,” and “the department will also review backlogged cases and re-evaluate cases that were denied.”

The Associated Press, in its story, stated that “the change could lead to $1 billion in loans being canceled for 72,000 borrowers, all of whom attended for-profit schools.”

“Borrowers deserve a simplified and fair path to relief when they have been harmed by their institution’s misconduct,” said Secretary of Education Miguel Cardona in that article. “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.”

This means a change from the formula used by the Trump administration to determine partial relief, instead putting in place “a streamlined path to receiving full loan discharges.”

While this decision only applies to students who already had their claims approved and received only partial relief, the department will be looking at both the backlog of claims yet to be decided and those that have been denied.

In fact, they characterized Thursday’s announcement as “a first step” and said it would be looking at rewriting the regulations down the road.

As The Hill commented, “This new approach is akin to the Borrower’s Defense, a legal caveat that protects student borrowers against fraudulent schools and colleges. A department spokesperson confirmed to The Hill that this was frequently used during the Obama administration, primarily with cases relating to claims of Corinthian College students.”

Lifehacker provided tips on how you might be able to put it in motion. As the site wrote,

“Through the Borrower Defense to Repayment program, you can apply for student loan forgiveness if your school has either been fraudulent with your tuition or misled you about your education (this is more commonly a problem with for-profit schools). These misrepresentations include untruthful claims of the school’s selectivity in admitting students, its rankings compared to other schools, false promises of job placement, earnings, or transferability of credits to and from other schools.”

“The key part here is proving that you were misled,” it emphasized. “You will not qualify for cancellation based on the poor quality of the course material or teaching staff, disputed grades, or substandard facilities.”


Written by Phil West