The Source: Record-Setting Number Of Borrowers Seeking Student Loan Forgiveness
In the past 6 months, 7,500 people representing a combined $164 million in student loans have asked to have their student loans forgiven. Citing a 20-year old law that had before 2015 only been used 3 times, the law provides loan forgiveness for defrauded students.
The rush comes on the heels of the U.S. Education Department ruling that the debt of 1,300 former students for Corinthian Colleges - a bankrupted chain of for-profit colleges - would be wiped clean. The action gained a lot of notoriety and likely brought the obscure provision to light.
And while most are students of for-profit universities, not all are.
"We have a lot of colleges and a lot of lousy programs out there," says Andrew P. Kelly at the American Enterprise Institute. "To say the only problems in the sector are in the for profit sector -with respect to borrowing and people being unable to pay back their loans is a fiction."
But what constitutes fraud when it comes to education? And what can the Feds do to ensure bad decisions aren't rewarded?
- David Halperin, formerly of the Center for American Progress, attorney who advocates for reform in the for-profit college market.
- Andrew P. Kelly, Director of the Center on Higher Education at the American Enterprise Institute