Student loan debt represents a major concern for the youngest Americans.
Early this year, Forbes reported that 44 million borrowers carry $1.31 trillion in debt among them. Most of those students at least received a degree and an education for their expenses. However, tens of thousands of Americans lost out on those opportunities when a slew of high-profile, for-profit colleges closed their doors, defrauding students of hundreds of millions of dollars collectively.
Despite this, the Associated Press and other news outlets report the Department of Education is considering a plan to undo an Obama administration policy of canceling $550 million in these deceptive loans. The expected outcome would be partial, rather than complete, forgiveness of these loans.
Students took out loans to receive an education. Yet they may not have their loans fully erased despite having no chance of ever getting what they were promised by the now-defunct schools.
Many of the institutions no longer in business openly warned prospective students that their credits likely would not transfer. That, in itself, isn’t a problem — except for the absolute lack of warning that these same schools were closing. As a result, students were left holding the bag on loans that no longer could get them the degree they sought.
One doesn’t need a doctorate in economics to realize this isn’t right; students who were equally defrauded wouldn’t have their loans equally forgiven.
Just as troubling are the steps U.S. Secretary of Education Betsy DeVos has actively taken Secretary of Education to overturn this consumer protection.
Use of a policy established in the early 1990s called borrower defense, which allowed students at for-profit and vocational schools to have their loans waived if it was determined they had been defrauded, had understandably exploded. But an expansion to the rule that would have added further protections for borrowers was frozen before it was scheduled to take effect in July.
This follows a lack of action on more than 65,000 borrower defense claims since the confirmation of DeVos — whose nomination was accompanied by controversy regarding her ties to for-profit education — in February. Not a single one has been approved in the last nine months, according to the AP.
DeVos defended her action by saying some students could have their loans canceled without a valid reason. Being on the hook for a fraudulent loan — while not having a college to attend or the ability to transfer credits to a new school — certainly strikes us as a valid reason.
Protecting students from deceptive loans for a good they won’t receive is a worthy cause, regardless of one’s political affiliation. As such, we encourage the Department of Education to stand behind those students sold a bill of goods instead of an education.