Department of Education Will Not Relieve Debts of Vast Majority of Defrauded Borrowers
Today's announcement that the Department will not provide broad relief to defrauded for-profit college students is a slap in the face to those who have been demanding – through debt strikes and mass loan disputes – broad-based loan cancellation for more than a year.
Corinthian scammed up to 500,000 people in a predatory lending scheme that was funded by US taxpayers and given the stamp of approval by the Department of Education. The Department's announcement today promises relief to only 190 Everest and Wyotech debtors and 546 Heald debtors.
As the Department has already acknowledged in its draft Defense to Repayment regulation, it has the authority to discharge debt automatically, and yet it refuses to do so. Instead the agency will require students who are living with trashed credit scores and enduring wage garnishment and harassing calls from collectors to reprove injury in order to even be considered for relief.
Furthermore, because the Department has arbitrarily decided not to cancel the debts of anyone who attended before 2010, no student who holds a FFEL loan will see a penny of relief, which cuts off the possibility of relief for almost half of all those who were scammed.
The Debt Collective will keep fighting with students until they receive every cent of relief to which they are entitled by law and to which they have been continually denied by the agency that was supposed to protect them from fraud and abuse in the first place.