Content courtesy of Adam Minsky, Forbes
A federal judge has ordered Education Secretary Betsy DeVos to cancel outstanding federal student loan debt for over 7,000 student loan borrowers.
The case concerns the Borrower Defense to Repayment program. This loan forgiveness program was originally created by the Obama administration to provide student debt relief to students who were misled, defrauded, or otherwise harmed by predatory colleges and universities – often, for-profit schools.
Under Secretary DeVos, the Department of Education has been trying to rewrite the rules governing the Borrower Defense program. New rules that went into effect on July 1 of this year substantially weakens the Borrower Defense relief provided to student loan borrowers by increasing the burden of proof required to prevail, and imposing a strict statute of limitations.
In addition, the Department of Education held up the processing of over 170,000 Borrower Defense applications, in some cases for years. A recent settlement agreement stemming from a class action lawsuit would force the Department to process thousands of delayed Borrower Defense applications.