Education Dept has stalled on approving debt relief for defrauded students

The Department of Education did not approve any applications for federal student loan relief in the second half of 2018, according to new department data reviewed by The New York Times.

The Times reported that the data likely means students defrauded by their colleges may not be able to turn to Washington for help in the near future.


The department, according to the Times, did not approve or turn down a single relief claim filed under the borrower defense rule from June to December, despite a federal ruling that the agency’s deliberate delay was illegal.

A judge ruled in October that the Education Department must enforce a rule implemented under the Obama administration that broadened and expedited loan relief for defrauded students after many of them were cheated by for-profit institutions, the Times reported. 

More than 150,000 pending claims now await approval from the agency, more than doubling the number the department inherited from the previous administration. The Education Department has blamed lawsuits filed by advocates seeking a more robust response to loan relief applications for the delay. 

“Pending litigation has slowed down the department’s processing to provide relief to additional borrowers,” Education Department spokeswoman Liz Hill told the Times. “We will fully implement the 2016 borrower defense regulations and ensure those who qualify for discharge receive it.”

The department “continues to assess alternatives to provide a fair, balanced and consistent approach for legitimate borrower defense applications,” as the discharge 22,000 approved applications are delayed. 

Hill added that the department is making efforts to expand its ability to manage applications, which are reportedly streaming in at a rate of 2,000 per week, according to the Times.

The Education Department did not immediately respond to a request for comment from The Hill.

Education Secretary Betsy DeVosBetsy DeVosHeadhunters having hard time finding jobs for former Trump officials: report Education Department moves to reverse Trump-era rules on campus sexual misconduct Watchdog says DeVos made nine figures in outside income during Trump years MORE defended for-profit institutions when she was grilled on Capitol Hill last month over the backlog, saying there was blame to be pinned "on both sides."

“No student should be defrauded, and if fraud is involved, there are consequences, and there will be consequences,” DeVos said. “But we should not be judging institutions by their tax status. Let’s be very honest here; there are bad actors on both sides of the equation.”

DeVos has criticized the Obama-era program as an offer of “free money” and has sought to curtail its scope to focus solely on forgiving debts of students who failed to get gainful employment and can provide proof they were otherwise harmed.

Hill said the Education Department under DeVos has discharged nearly 50,000 borrower defense claims totaling more than $534 million. Many of the claims were left over from the Obama administration, according to the Times.

The agency released figures in response to a request from Sen. Patty MurrayPatricia (Patty) Lynn MurrayHouse passes bill to combat gender pay gap Schumer kicks into reelection mode Democrats target Trump methane rule with Congressional Review Act MORE (D-Wash.) over the pileup.

“There’s nothing stopping Secretary DeVos from providing relief to struggling borrowers today, and she needs to begin approving claims immediately so students who were cheated out of their education and savings get the relief they are entitled to,” Murray said in a statement to the Times.