Reconciliation will allow $ 6 billion for fraudulent college students | Lifestyle

COLLINBINKLEY-AP Educational Writer

According to a settlement proposed in a Trump-era lawsuit, the Biden administration has agreed to cancel a $ 6 billion student loan to about 200,000 former students who allegedly were fooled by the university.

The agreement, filed in federal court in San Francisco on Wednesday, automatically revokes the debt of federal students who were enrolled in one of more than 150 universities and later applied for debt forgiveness on suspicion of school misconduct. did.

Almost all schools involved are for-profit universities. This list includes the University of Debris, the University of Phoenix, and many other chains that are still in operation, as well as many that have been collapsed in recent years, including the ITT Institute of Technology.

Secretary of Education Miguel Cardona said in a statement that the settlement would resolve the claim “in a fair and impartial manner for all parties.”

The transaction has not yet been approved by a federal judge. Hearing of the proposal is scheduled for July 28th.

People are also reading …

Once approved, it will be a major step in the Biden administration’s efforts to clear unprocessed claims filed through the Borrower Defense Program. This allows students to clear their federal loans if the school makes false advertising claims or otherwise misunderstands.

The class action was initially filed by seven former students who claimed to have deliberately stagnated the borrower’s defense process while President Donald Trump’s Secretary of Education Betsy DeVos was rewriting the rules. When the proceedings were filed, no final decision was made on any claim for more than a year.

When the department under DeVos began to decide on claims a few months later, it often issued tens of thousands of denials without any explanation.At that time, the judge was overseeing the case Blast DeVos for “Blistering Pace” Her approach is to “dry the borrower” and refuse

Tens of thousands of borrowers were still in distress when the Biden administration took over and began negotiations for a settlement in 2021, according to court documents. The latest federal data show that there are more than 100,000 pending claims for the defense of the borrower.

Under the settlement, anyone who attends an eligible school and applies for cancellation as of Wednesday will be completely exempt from federal student loans and interest. They will also receive a refund of past payments made on those loans.

An additional 68,000 plaintiffs who did not attend eligible schools will receive a “rationalized review” of their claims. The oldest claim is reviewed first and the latest claim is determined within two and a half years.

All borrowers involved in the surge of DeVos denials will have their denials revoked and their claims will be treated as if they were on hold from the date they were first filed.

A project on predatory student lending on behalf of students in the proceedings said the agreement would help create something “fair, just and efficient for future borrowers.”

“This serious settlement provides answers and certainty to borrowers who have long fought hard for the fair resolution of their defense claims after being deceived by the school and ignored or rejected by the government. “Masu”, the business.

According to the settlement, the borrower’s defense claim is usually examined individually, but due to “general evidence of institutional misconduct” at the school in question, the Ministry of Education will allow automatic cancellation in this case. Decided.

According to the agreement, some schools already had evidence of “substantial illegal activity”, while others were included due to high billing rates from ex-students.

The borrower’s defense process was initiated by Congress in 1994, but was rarely used until the collapse of the Corinthian College chain in 2015. For-profit companies closed campuses in the midst of widespread fraud and urged thousands of students to apply for debt forgiveness.

As a result, the Obama administration has expanded its program to create clearer rules. It has become central to the government’s efforts to lie to recruit students and crack down on for-profit colleges that use high-pressure tactics. Students from Corinthian and other chains have signed up for a promise to land a high-paying job, but said they would only graduate with little prospect of a job.

Biden administration earlier this month Agreed to cancel federal student debt For those who attended Corinthian schools from the establishment of the company in 1995 to the collapse 20 years later. This measure will eliminate $ 5.8 billion in debt to more than 560,000 borrowers. This is the largest single debt in the history of the Ministry of Education.

The settlement is in addition to the government’s efforts to cancel the debt of a particular group of borrowers.It has Eliminate billions of dollars in additional funding With debt from other former commercial college students Borrowers with severe disabilities When Public service work..

Biden is also facing increasing pressure to pursue debt forgiveness for large numbers of students.Recent White House Notified that we are considering canceling $ 10,000. However, no decision has been reached.

The Associated Press education team is supported by the Carnegie Foundation in New York. AP is solely responsible for all content.

Copyright 2022 AP communication. all rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.

Reconciliation will allow $ 6 billion for fraudulent college students | Lifestyle

Source link Reconciliation will allow $ 6 billion for fraudulent college students | Lifestyle

Back to top button