The Department of Education appears poised to pitch new rules that student loan advocacy groups say would make it significantly more difficult for students defrauded by for-profit colleges to prove their plight and qualify for federal student loan debt relief.
Proposal drafts obtained by Politico and BuzzFeed News show how Secretary of Education Betsy DeVos and department officials are hoping to revise an Obama-era regulation known as “borrower defense,” which outlines how student loan borrowers who have been defrauded can apply to have their loans forgiven.
Toward the end of the Obama administration, Education Department officials streamlined the regulation in the wake of investigations that found for-profit schools were misleading students about the value and cost of their degrees, their potential future earnings and their expected debt burdens.
The draft rules from DeVos and her team would raise the bar by requiring students to prove that a school intentionally deceived them. Students would have to meet a “clear and convincing” standard of evidence – a more rigorous measure than the “preponderance of evidence” standard set by the Obama administration.
Such a proposal echoes how DeVos rescinded Obama-era guidance on campus sexual assault, marking a contentious shift in how schools police compliance with Title IX, a federal law barring discrimination based on sex.
The proposed revision isn’t necessarily surprising: DeVos called for a regulatory reset of Obama-era regulations on for-profit colleges back in June and has criticized the loan-relief framework on many occasions, saying defrauded students have simply had to “raise his or her hands to be entitled to so-called free money.”A renegotiation of the borrower-defense regulation is currently ongoing, with an expert panel convened by the Education Department wrapping the last day of its first of three three-day sessions in November. The second session is slated to begin next week, and the third is set for February.
News of the proposed loan-relief revisions comes just weeks after the department unveiled a new student loan debt-relief plan that would provide only partial relief for some students defrauded by colleges, making the level of reimbursement received commensurate with borrowers’ current earnings.
More than 100,000 debt-relief claims are currently pending at the Department of Education – a backlog that’s existed for months. To date, the Education Department has approved for discharge 12,900 pending claims submitted by students who attended campuses operated by the now-shuttered for-profit giant Corinthian Colleges. About 8,600 pending claims have been denied.