New rule limits students’ access to loan forgiveness

WASHINGTON — Education Secretary Betsy DeVos has issued a new rule on loan forgiveness for students defrauded by their colleges, a rewrite of Obamaera regulations that advocates say will make it tougher for students to get relief.

DeVos said schools must be held accountable but the Obama rule wasn’t working. The new rule, she said, will “treat students and taxpayers fairly.”

Loans issued on July 1, 2020, or later would be affected by the new rule. The department estimates it will result in a net savings of $11.1 billion over 10 years of loans.

DeVos’ rewrite of what’s known as the borrower defense to repayment rule is the latest in the Trump administration’s campaign to scale back Obamaera regulations targeting forprofit colleges. It also rescinded a 2014 gainful employment rule that sought to cut off federal funding to programs that consistently left graduates with high student debt that they are unable to pay off.

“With this policy overhaul, Secretary DeVos has cemented her legacy as best friend to predatory colleges and enemy to the students they rip off,” Yan Cao, a fellow at the Century Fund, said in a statement.

The 2016 borrower defense rule was put into place after the closure of Corinthian Colleges, which left thousands of students with student loan debt and nothing to show for it. DeVos froze the rule while it was being rewritten, but a federal judge ruled that the delay was unlawful.

James Kvaal, president of the Institute for College Access and Success, said the new rule will make it more difficult for students defrauded by their schools to get relief.

Students, he said, would be required “to submit evidence that students do not have and cannot get,” and file their claims as individuals, rather than as part of a group that was defrauded. There also would be a threeyear limitation on filing a claim.

Career Education Colleges and Universities, which represents dozens of forprofit colleges, supports the rewrite, said Michael Dakduk, the organization’s executive vice president. “We think it provides fairness and due process to all parties involved,” he said.

Carole Feldman is an Associated Press writer.