- Many students approved for federal government assistance after being defrauded by for-profit colleges are only getting partial loan forgiveness as a result of the earnings-based tiered relief policy used by the Trump administration, according to The Associated Press.
- About 1,000 of the 16,000 fraud claims approved so far under Education Secretary Betsy DeVos have been granted full forgiveness. The department has denied 9,000 loan forgiveness claims, while none were turned down during the Obama administration and no partial loan forgiveness was offered. Partial relief presently accounts for about 31% of approved cases, covering roughly 30% of a student's outstanding loan.
- The Education Department said some cases it rejected were from the previous administration and that the tiered approach intends to speed the approvals process and spare taxpayers potential "massive costs."
A year ago, the AP reported that the Education Department had been slow to act on student requests for relief, with more than 65,000 claims awaiting action as it reconsidered policies from the Obama administration increasing protections for students.
The tiered relief policy put forward by DeVos is among others she has supported that critics charge unfairly benefit for-profit institutions. Another would renew recognition of an accrediting body that the Obama administration had sought to limit by effectively cutting off funding to poorly performing for-profit colleges that had unfairly treated their students.
Meanwhile, DeVos is seeking to eliminate Obama-era rules requiring for-profit colleges to prove their graduates were able to find "gainful employment" in order to be able to repay their debt. The rules also required institutions to inform prospective students about whether they met certain job-placement standards.
Critics of DeVos and her policies say they are intended to benefit the for-profit industry because she has connections to it. She also appointed to a top regulatory post a former official from DeVry University, whose parent company paid $100 million for misleading its students about their potential for getting jobs and high salaries.
Advocates of for-profit colleges contend the Obama administration drove some of the institutions out of business and caused the stocks of others to drop dramatically by over-regulating them. They say the loan forgiveness program was too costly and slow, and that it was unfair to burden taxpayers with the expense.