Betsy DeVos Lost a Court Battle and Is Finally Canceling $150 Million in Student Debt 


The Education Department will erase about $150 million in student debt, begrudgingly applying an Obama-era protection that Education Secretary Betsy DeVos had attempted to dismantle.

In July 2017, attorneys general from 18 states and Washington, DC sued DeVos for delaying the implementation of an Obama-era rule, called the Borrower Defense to Repayment rule, that helped students who had been defrauded by colleges seek loan forgiveness. Massachusetts Attorney General Maura Healey, the suit’s lead plaintiff, called the delay “a betrayal of her office’s responsibility and a violation of federal law.”

In a set of rulings in September and October, a federal judge ordered the Education Department to comply with the rule. This week, the Department of Education finally announced that it will cancel about 15,000 loans, Politico reports:

About half of the borrowers who will now receive loan discharges attended campuses owned by Corinthian Colleges, the chain of for-profit colleges that went bankrupt in 2015. The remaining students attended other schools that closed sometime between Nov. 1, 2013, and Dec. 4, 2018.
The department said some of the loans that will be canceled are PLUS loans owed by parents whose students attended schools that closed.

The Education Department will begin emailing borrowers about the payments on Friday, which could take up to 90 days to process.

The Education Department is only recognizing students at schools that shut down, excluding students who were misled or defrauded by schools that remained in business. “Many of those students still have debt relief applications pending,” CNN reports.

“This is a good first step, but it’s not good enough,” Sen. Patty Murray, a senior Democratic member of the Senate’s Subcommittee on Labor, Health and Human Services, and Education. “I call on Secretary DeVos to abandon her attempts to rewrite the borrower defense rule to let for-profit colleges off the hook and instead fully implement the current rule and provide relief to more than 100,000 borrowers who were cheated out of their education and savings.”

I’m sure that DeVos, always one to look out for the interests of students, will do the right thing.

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