Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

The Department of Education will continue collecting debt from students who were defrauded by the for-profit chain Corinthian Colleges, reversing an Obama administration decision to forgive for-profit student debt. (Photo: Quinn Dombrowski/Flickr/cc)

First by For-Profit College, Now 'Screwed' by DeVos as Trump's DOE Rolls Back Debt Relief for Defrauded Students

While saying "no fraud is acceptable" in one breath, DeVos announces government will continue demanding debt payments from defrauded students

Julia Conley

Consumer advocacy groups denounced the Department of Education's decision on Wednesday to reverse the Obama administration's pledge to forgive for-profit student loan debt—instead introducing an income-based system under which only some students will be liable for debt they incurred when attending schools in the fraudulent Corinthian Colleges chain.

Education Secretary Betsy DeVos announced that instead of fully forgiving Corinthian students' debt, the department will judge whether each student is deserving of relief based on their income. Students earning at least half of what their peers earn per year, on average, will be determined to have benefited from their Corinthian degrees—even though they were decieved into studying at the for-profit school. Students earning considerably less than those in their age group will be given full debt relief.

The change in policy came a week after the Trump administration was sued by four states over its delay in approving claims filed by former Corinthian students.

DeVos noted that while "no fraud is acceptable," her decision "protects taxpayers from being forced to shoulder massive costs that may be unjustified."

The Corinthian Colleges chain was shut down in 2015, weeks after Obama's Education Department slapped the business with a $30 million fine for inflating students' job placement rates.

An estimated 20,000 former Corinthian students with pending claims against the school will be affected by DeVos's deicsion.

DeVos's proposals for changing student loan forgiveness programs have come under attack this year, with critics noting that the secretary has held investments in a student loan collection ageny and hired the CEO of a private student loan company to head the Office of Federal Student Aid.

On social media, critics condemned DeVos for the move.

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

... We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

Biden Drilling Report Blasted as 'Shocking Capitulation to the Needs of Corporate Polluters'

"Greenlighting more fossil fuel extraction, then pretending it's OK by nudging up royalty rates, is like rearranging deck chairs on the Titanic," said one campaigner.

Jessica Corbett ·

UNESCO Members Adopt First Global AI Ethics Agreement 'To Benefit Humanity'

"We're at a critical juncture in history," said Ethics in Tech founder Vahid Razavi. "We need as humans to come together and decide what is the best course of action to take with these technologies before they surpass us in their abilities."

Brett Wilkins ·

Progressive US Lawmakers Mark Black Friday With Calls to Pass the PRO Act

"The right to organize, fight for better working conditions, and fair pay must always be protected."

Jessica Corbett ·

'We Are Fighting Back': Global Black Friday Strikes and Protests Seek to #MakeAmazonPay

"We are workers and activists divided by geography and our role in the global economy but united in our commitment to Make Amazon Pay fair wages, its taxes, and for its impact on the planet."

Kenny Stancil ·

'It Was Entirely Avoidable': Rich Countries Blamed as New Covid Variant Sparks Global Alarm

"Allowing new variants to emerge and spread, 13 months into the vaccine era, is a policy choice by the rich world."

Jake Johnson ·

Support our work.

We are independent, non-profit, advertising-free and 100% reader supported.

Subscribe to our newsletter.

Quality journalism. Progressive values.
Direct to your inbox.

Subscribe to our Newsletter.

Common Dreams, Inc. Founded 1997. Registered 501(c3) Non-Profit | Privacy Policy
Common Dreams Logo