The Department of Education recently changed their position in forgiving federal student loans that students of Corinthian Colleges several schools were burdened with after the schools were found guilty of misleading students and deceit.
Leap back to February 2015 when the Consumer Financial Protection Bureau and Department of Education announced student loan forgiveness for borrowers of Corinthian College’s loans.
“Today’s action will provide substantial relief to current and past students who were harmed by Corinthian’s predatory lending scheme,” said CFPB Director Richard Cordray. “These consumers were lured into high-cost loans destined to default, and then targeted with aggressive debt collection tactics. We will be vigilant to ensure that consumers receive this important relief and that others are protected in the for-profit college industry.”
Students who attended one of the Corinthian schools were scheduled to see an immediate 40 percent reduction in their loan balances. Many then applied for total forgiveness under the Borrower Defense to Repayment program. Many received the full discharge of the remainder of their loans after review of their case.
New President Changes Tune at Department of Education
The current Department of Education no longer thinks students should be eligible for loan forgiveness and elimination of fraudulent loans. In fact, loan relief is now as low as 10% of the loan balance even if the student received no benefit from the education.
Recently the Justice Department was in court fighting back in a suit seeking to permit the same level of loan forgiveness previous offered and obtained by Corinthian students.
“There were never affirmative representations by the department that everyone who filed claims would get 100 percent loan relief,” Justice Department lawyer Karen Bloom said in court Monday.
According to Court House News, “But attorneys for a proposed class of borrowers say the department’s Average Earnings rule should be struck down because it impermissibly revokes benefits for borrowers, some of whom already applied for and expected full debt relief. The plaintiffs also claim the department failed to reasonably explain its change in policy and that it uses social security data in a way that invades borrowers’ privacy.”
You know, they do have a point there worth pursuing.
“The Department of Education says the policy was changed to ensure borrowers are only compensated for “actual harm suffered.” Which has to be utter BS because loan forgiveness is based on average income no matter if you work in a field you were enrolled in while in the discredited colleges. It’s not even apples and oranges, which at least would still be in the fruit family. It’s apples and monkey nuts.