WASHINGTON (AP) – Students who were cheated by their colleges and received only partial exemptions from their federal loans can now see that they have been canceled altogether, the Biden administration announced on Thursday, reversing Trump’s governing policies.
The change could lead to the cancellation of $ 1 billion in loans to 72,000 borrowers, all of whom attended for-profit schools.
“Borrowers deserve the simplified and fair way of being harmed when they have been harmed by the dishonest behavior of their institution,” said Education Secretary Miguel Cardona. “A careful examination of these claims and the evidence surrounding them has shown that these borrowers have been harmed. We will give them a fresh start from their debt.”
The department said it was scrapping a resolution used by the Trump administration to decide on a partial easing, and was implementing a “simplified way to get full credit outflows.”
Thursday’s action applies to students who have already approved their applications and received only partial assistance.
During a briefing with reporters, a senior department official said the agency continues to review both claims that have yet to be resolved and those that have been rejected.
The borrower protection repayment plan allows students to cancel their federal loans if they have been defrauded by their colleges. The Obama administration has expanded its program to help students attending nonprofit colleges. But Betsy Davos, President Donald Trump’s secretary of education, pulled it off, saying it was too easy for students to write off loans, and revised the program to make it harder for them to get help, including only partial loan cancellations. ,
Last March, Congress voted to repeal the DeVos Amendment, but Trump vetoed it.
Nearly two dozen attorneys have sued the Trump administration over a borrower repayment plan that allows borrowers to cancel loans if their colleges make false claims to enroll them. One of the plaintiffs in the lawsuit was California Attorney General Xavier Becerra, who on Thursday voted to endorse President Biden as secretary of health.
The lawsuit, filed last July, alleges that DeVos changed its policy without justification, failed to provide a meaningful process for forgiving students’ loans, and created “arbitrary barriers” for them, including forcing them to prove that they schools deliberately misled them.
Biden’s education department on Thursday called the move a “first step” in resolving the borrower’s defense. It said it would consider rewriting regulations on the road.