Boots & Sabers

The blogging will continue until morale improves...


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0932, 15 Dec 18

Taxpayers to Refund Borrowers for Bad Debt

I truly dislike a policy in which the taxpayers have to refund a private transaction that went bad. It’s a horrible policy and it was just a handout from the Obama administration to buy votes with our money. But I am heartened to see Executive Branch officials who follow the law – even when they don’t like it. Too often we saw the Obama Administration just ignore court rulings with which they disagreed and plow ahead with their ill-advised policies.

The Education Department said Thursday it will cancel $150 million in federal student loan debt, despite Secretary Betsy DeVos’ efforts to overhaul the Obama-era policy.

DeVos proposed restricting “borrower defense” claims filed by former students whose schools closed or made false promises, but has to carry out regulations after court rulings sided with students.

Three months ago, a federal judge ruled that DeVos’ attempts to kill the 2016 regulations were illegal, Politico reported. The judge also rejected for-profit colleges’ bid to stop the policy in October.

The department said Thursday it will forgive loans for about 15,000 borrowers whose schools closed, preventing them from finishing their programs. About half of those borrowers attended Corinthian Colleges, a for-profit educational chain that closed its campuses in 2015. They will account for $80 million of the automatically discharged loans, while borrowers whose schools closed between Nov. 1, 2013, and Dec. 4, 2018, will account for the other $70 million.


0932, 15 December 2018


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