Washington, D.C.— Today, the U.S. Department of Education and Education Secretary Betsy DeVos published a revised Borrower Defense regulation, demonstrating yet again its unwavering commitment to allowing institutions to take advantage of students. The proposed rule dramatically scales back protections for students who have been cheated and taken advantage of by their school. Maggie Thompson, executive director of Generation Progress, issued the following statement in response:
“At a time when students are saddled with tens of thousands of dollars in loan debt, Betsy DeVos’ new directive will severely hurt the economic well-being of students cheated by predatory schools. It’s simple: if your school defrauds you, you deserve to have your loans cancelled, and the Department should make sure that the school—not taxpayers—pays for the fraud. DeVos has already denied justice to borrowers defrauded by Corinthian Colleges and ITT Tech, now she is attempting to strip all borrowers of protection, while safeguarding the profit margins of shady schools. This giveaway to a predatory industry is a part of the Trump administration’s culture of corruption.”
The revised rule places the burden of proving wrongdoing on borrowers, requiring them to furnish audio, video, or textual evidence, of a school’s intention to mislead or defraud them. The Department is also considering forcing defrauded borrowers seeking loan forgiveness to default on their federal student loans and be in some form of collections, such as wage garnishment or tax offsets, to apply for loan relief. This effectively forces borrowers who have been cheated by predatory colleges to ruin their credit to access their statutory rights to loan cancellation. This rule also denies students their day in court by allowing schools to force students into arbitration, a practice that enables schools to sweep shady and illegal practices quietly under the rug.
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