States To Education Secretary DeVos: Stop Delaying Loan Forgiveness For Students Deceived By Corinthian Colleges

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Two months after the Attorneys General from dozens of states sent letters to former students of defunct for-profit college chain Corinthian Colleges reminding them to apply for federal student loan discharges, a number of those same state officials are calling on Education Secretary Betsy DeVos to stop delaying loan forgiveness.

The Attorneys General for 19 states and the District of Columbia sent a letter [PDF] DeVos Monday urging her to stop delays related to the Department of Education’s Borrower Defense program that has left tens of thousands of students with federal student loans in limbo.

Under the Borrower Defense program, a student’s federal education loans can be forgiven if they can prove their college used deceptive practices to convince them to enroll.

According to the letter, former students of Corinthian’s WyoTech, Heald College, and Everest University are experiencing delays in review and approval of their loan cancellation applications.

“Relieving these hard-working Americans of their fraud-induced student debt will free them to participate more fully in their local economies, or even continue their educations with reputable schools,” the letter explains.

The AGs estimate that more than 27,000 students nationwide who have already been approved for loan forgiveness have yet to see their loans discharged.

This delay, as detailed previously by a number of lawmakers, could cause students to rack up additional costs as many are nearing the end of a 12-month forbearance time period on their loans. Once this timeframe is over, the students face restarting monthly payments on debts that should be canceled.

The AGs urged DeVos to speed up the review of applications and work to finalize the discharge of loans for applications that have already been approved.

The letter asks DeVos to provide information on what the Dept. of Education is doing to rectify the backlog of applications and to provide a timeframe for the discharge of student debts.

Additionally, the AGs ask DeVos to abandon the application process to automatically discharge all eligible loans as the Department has already determined that students are eligible for forgiveness.

“We should be doing all we can to allow students to pursue their educations without the burden of crushing student loan debt,” New York Attorney General Eric Schneiderman said in a statement. “I call on Secretary DeVos to stop delaying this common-sense solution for those who were duped and ripped off by Corinthian.”

The AGs’ letter comes less than a month after a group of senators demanded answers about the delay of payment on tens of thousands of student loan discharges that have failed to reach intended students.

According to that letter, the Dept. of Education notified 23,000 students in January that their Borrower Defense claims had been approved and they would receive discharges and refunds within 60 days and 120 days.

Despite this, the senators say they have received reports that many previously approved students have not obtained the relief they were promised within 120 days.

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