'Good First Step' as DeVos Forced to Cancel $150M in Student Loan Debt for Thousands Scammed by For-Profit Schools

After a federal judge struck down billionaire Education Secretary Betsy DeVos' attempt to gut protections for students scammed by for-profit colleges, the Department of Education announced on Thursday that—because of the court mandate—it is canceling $150 million in student loan debt for around 15,000 defrauded borrowers.

"The Department of Education illegally delayed implementation of the 2016 borrower defense rule, but because our clients in Bauer v. DeVos were willing to fight back, 15,000 students are finally getting the relief they are owed," said Toby Merrill, director of the Project on Predatory Student Lending, which represented the students leading the legal fight against DeVos.

While celebrating the Education Department's cancellation of $150 million in student loan debt as a "good first step" in a statement on Thursday, Sen. Patty Murray (D-Wash.)—top Democrat on the Senate Education Committee—added that "it's not good enough."

"It's disappointing that it took a court order to get Secretary DeVos to begin providing debt relief to students left in the lurch by predatory for-profit colleges, but I am pleased the department has finally started implementing [the borrower defense] rule and that some of the borrowers who attended schools like Corinthian Colleges and ITT Tech are finally getting their loans cancelled," Murray said.

"It should not have taken litigation to force the department to do its job to protect students."
—Adam Pulver, Public Citizen Litigation Group

Murray went on to demand that DeVos "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."

According to Politico, around "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."

DeVos' effort to delay and rewrite the Obama-era borrower defense rule—which was designed to provide debt relief to students who were misled or defrauded by for-profit colleges—sparked a flood of condemnation and lawsuits from students, consumer advocacy groups, members of Congress, and state attorneys general.

In September, a federal court delivered a "crushing blow" to DeVos' agenda by ruling that the billionaire education secretary's attempt to deny relief to students scammed by for-profit colleges was "procedurally invalid" and "unlawful."

Adam Pulver, an attorney with Public Citizen Litigation Group, concluded: "It should not have taken litigation to force the department to do its job to protect students."