For some defrauded students, only partial loan forgiveness
WASHINGTON (AP) The Department of Education has begun notifying some former Corinthian Colleges students that it will forgive only one-half or less of their federal student loans, even though the students were defrauded by the now-defunct schools, The Associated Press has learned.
The action is part of Education Secretary Betsy DeVos' push to ease regulations governing for-profit schools. DeVos says she wants to protect taxpayers' money, but critics say the Trump administration has deep ties to for-profit colleges and is putting industry interests ahead of students.
Two weeks ago, Sarah Dieffenbacher, a California health care worker, received a letter saying the agency would discharge only 50 percent of her student loans. The mother of four had borrowed about $67,000 to train as a paralegal at Everest college in Ontario, California, part of the Corinthian chain, but was unable to land a job in the field.
In her first interview since receiving the agency's decision, Dieffenbacher told the AP on Thursday that the decision was utterly unfair.
Department press secretary Liz Hill defended the agency's decision.
"We have said from the beginning that students whose earnings are at 50 percent or more of their peers who attended a gainful employment passing program will receive proportionally tiered relief to compensate for the difference and make them whole," Hill said in a statement Friday.
The gainful employment rule was designed to ensure that graduates would be able to earn enough money to pay off their student loan debt. DeVos has appointed a special committee to rewrite the rule.
She announced in December that she also was breaking with the Obama administration's practice of fully wiping out the loans of defrauded for-profit students and would grant some only partial relief.