DeVos Announces Rules Protecting Taxpayers From ‘Massive’ Student Loan Costs
Education Secretary Betsy DeVos announced rules protecting taxpayers from “massive” student loan costs Wednesday.
The Department of Education (DOE) unveiled a tiered relief system that will provide aid to defrauded borrowers in an amount commensurate with their earnings, reported The Hill.
“No fraud is acceptable, and students deserve relief if the school they attended acted dishonestly,” DeVos said in a statement. “This improved process will allow claims to be adjudicated quickly and harmed students to be treated fairly. It also protects taxpayers from being forced to shoulder massive costs that may be unjustified.”
Whereas former President Barack Obama’s policy provided full relief for defrauded students, DeVos’s policy shifts burden off of the taxpayers by implementing a tiered system for loan forgiveness.
Under the new system, if more than half of the graduates from a defrauded borrower’s college earn more than the borrower, the borrower receives full relief for his loans. If half of the graduates from a defrauded borrower’s college earn more than the borrower, the borrower receives 50 percent relief for his loans. If the defrauded borrower earns more than 60 to 69 percent of his fellow graduates, he receives 40 percent relief for his loans, and so on.
The DOE explained that doling out relief based on the value of students’ education aligns with 34 CFR 685.206 [C], which states that the Secretary may excuse the borrower from repaying “all or part of the loan and associated costs and fees that the borrower would otherwise be obligated to pay.”
DeVos has approved 12,900 pending claims for relief and denied 8,600 pending claims, many of which were marked for denial during the Obama administration.
The Daily Caller News Foundation reached out to the DOE for further comment, but received none in time for press.
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