The Dept. of Education halting student debt forgiveness rules

Sen. Warren other Democrats protest student loan changes

Sen. Warren, other Democrats protest student loan changes

DeVos, a Republican and advocate of public-private partnerships in education, said she was delaying the effective date of the rule on accelerating the process, which was enacted at the end of past year under the administration of former President Barack Obama, a Democrat.

WASHINGTON — The Education Department announced Wednesday that it will change two key Obama-era rules governing student loan forgiveness in cases involving fraud and misconduct by universities.

It stipulates that student debt repayment from these programs can not exceed 8 percent of annual earnings or 20 percent of discretionary income, or else they risk losing eligibility for federal student aid programs.

Under the rule, which went into effect in 2015, the estimated annual loan payment of a typical graduate has to be at or below 20 percent of his or her discretionary income or 8 percent of his or her total earnings or an institution risks losing its ability to participate in taxpayer-funded federal student aid programs. The Education Department will conduct hearings on the regulations in July.

Betsy DeVos, the secretary of education: "Fraud, especially fraud committed by a school, is simply unacceptable". The senators contend, accurately, that the HEA and APA "prohibit the Department from unilaterally amending or delaying a final rule except through a new negotiated rulemaking or in very narrow circumstances", where the Department, as the relevant statute reads "for good cause finds ... that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest".

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"The result is a muddled process that's unfair to students and schools, and puts taxpayers on the hook for significant costs", she said. "Some borrowers should expect to obtain discharges within the next several weeks".

The borrower defense to repayment rule set out to better protect student borrowers against misleading and predatory practices by giving creating consistent, clear, fair and transparent processes to file claims.

The gainful employment rule requires schools to ensure their career training programs actually prepare students for good-paying jobs that allow them to pay for their student loans.

The for-profit college industry did indeed lobby relentlessly in an unsuccessful effort to block the borrower defense rule, and they continue to fight to overturn the rule.

Speaking to an audience of charter school educators and supporters Tuesday, DeVos urged them to keep innovating rather than becoming another complacent generation of education bureaucrats. He will seek further answers from the Secretary about the devastating cuts to Career and Technical Education grants, TRIO and GEAR UP funding, and the Full Community Schools program, which funds programs like Reconnecting McDowell.

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