Federal law provides for loan discharges when students are defrauded by schools like Corinthian Colleges that seek to profit from federal student loans, grants, and veterans benefits at student and taxpayer expense. However, until recently, this right has not been publicized and few borrowers have gotten the relief to which they are entitled. The Education Department has proposed new rules to clarify and strengthen some protections for defrauded federal student loan borrowers, and these rules will help curb bad behavior by predatory colleges. However, the rules would also roll back eligibility for relief in some cases and make it likely that many defrauded borrowers will get partial or no relief.
The Department deserves praise for proposing regulations to better protect students and taxpayers from fraud and other misconduct by unscrupulous colleges, but the new rules need to make it easier for borrowers to get full relief, not harder.
Submit your comment to the Department now by taking action below.
We need to tell Education Secretary John King that the rules should provide full loan relief to defrauded students, provide automatic discharges when there is sufficient evidence of a school’s wrongdoing, not impose time limits on relief for defrauded borrowers, and close gaping loopholes allowing unscrupulous schools to prevent injured students from having their day in court.
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