Dept. of Education to cancel $150 million in student loan debt

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The U.S. Department of Education announced Thursday it would automatically offset $150 million in student loans connected to for-profit colleges that closed in recent years.

The move has been made under an Obama-era policy that a federal judge in October essentially forced the U.S. Secretary of Education Betsy DeVos to execute, Politico initially reported.

The release of loans applies automatically to about 15,000 pupils who attended now-defunct colleges that closed between Nov. 1, 2013, and Dec. 4, 2018, according to the department’s announcement. About half of the affected attended Corinthian Colleges, Inc., a chain that closed on April 27, 2015, the department stated. “Other students who visited recently closed campuses or who think they were otherwise defrauded can still apply to have their loans canceled,” the department said.

The ranking member of the Health, Labor, Education, and Pensions Committee said DeVos was”still trying to rewrite the underlying rule” that sparked the loan cancellations. Back in April, DeVos canceled memos published by the Department of Education under President Barack Obama that enforced stricter rules on the way the federal government manages student loan debt linked to for-profit schools. California and other states sued.

Murray’s office said more than 100,000 students have outstanding claims against the associations in question. “It is disappointing that it took a court order to get Secretary DeVos to start providing debt relief to pupils left in the lurch by predatory for-profit colleges,” Murray explained,”but I am pleased the section has finally started implementing this rule and that some of the debtors who attended schools like Corinthian Colleges and ITT Tech are finally receiving their loans canceled. This is a fantastic first step, but it isn’t good enough.”

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