Betsy DeVos To Consider Tougher Rules For Student Loan Forgiveness

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DeVos has said the rules were "overly burdensome and confusing", and her goal is to streamline the process.

Like many in the Trump administration, Secretary of Education Betsy Devos has spent a fair amount of time at her new post seeking to undo rules put in place during the Obama administration - including rewriting the rules that protect student loan borrowers from predatory, for-profit colleges.

According to NRP, DeVos is another step closer to toughening the rules that would allow debt forgiveness for students who fall prey to fraudulent practices.

The existing program, called Borrower Defense to Repayment, provides relief to federal student loan borrowers who attended a school that misled them or engaged in other misconduct in violation of certain laws.

Education Secretary Betsy DeVos convened a special committee to rewrite the policy in June, saying the regulations are "overly burdensome and confusing" and need to be streamlined.

What changes are being proposed?

  • Applicants would have to establish "clear and convincing evidence" of fraudulent misconduct as opposed to the prior "preponderance of evidence."
  • Applicants must "demonstrate that the college's misrepresentation to them was intentional – or at least reflected 'a reckless disregard for the truth'."
  • Applicants must prove that misrepresentation led to monetary damages.
  • The time frame for filing a claim would be changed from six to three years "of the date the borrower discovered, or reasonably should have discovered, the misrepresentation."

DeVos has indicated that following implementation of the Obama-era rules, for-profit colleges have criticized the language describing misrepresentation and breach of contract as too broad.

The rules were introduced in 2016 in response to several high-profile cases in which for-profit institutions — including Corinthian Colleges, DeVry and ITT Tech — committed widespread fraud by lying about job placement rates and used other deceptive tactics to lure students into enrolling.