DeVos to reduce loan forgiveness for some defrauded students

Greg Nash

The Department of Education on Wednesday announced new rules for providing aid to students claiming they were defrauded by their colleges that limits some student loan refunds according to income.

Education Secretary Betsy DeVos said the new system “protects taxpayers from being forced to shoulder massive costs that may be unjustified.”

Under the new process, students’ loan forgiveness will be determined by their income. Those making less than half of what their peers earn will receive full relief, the department said.

“No fraud is acceptable, and students deserve relief if the school they attended acted dishonestly. This improved process will allow claims to be adjudicated quickly and harmed students to be treated fairly,” DeVos said in a statement


Those making more than half of what their peers earn will have their debt relief tied to their income. For example, students who take home 70 percent of their peers’ incomes will have 30 percent of their loans forgiven.

The new policy is a departure from Obama-era rules, which provided full loan forgiveness to defrauded students.

Tens of thousands of students who were deceived by now-defunct for-profit programs had more than $550 million in loans erased under the Obama administration, according to The Associated Press.

The change was under consideration as recently as October.

DeVos has also revised Obama-era policies on sexual assault on college campuses.

Tags Betsy DeVos

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