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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.


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