U.S. not granting loan relief to defrauded students: inspector general




  • In US
  • 2017-12-11 22:47:56Z
  • By By Lisa Lambert
 

By Lisa Lambert

WASHINGTON (Reuters) - The U.S. Education Department under President Donald Trump and Secretary Betsy DeVos has stopped cancelling the student-loan debt of people defrauded by failed for-profit schools and those borrowers face mounting interest and other burdens, its inspector general said on Monday.

DeVos is seeking to redo the process for cancelling the debts of people who attended Corinthian Colleges, which collapsed in 2015 amid government investigations into its post-graduation rates, and other failed schools.

In the final days of his administration, President Barack Obama approved rules speeding up the debt cancellations. DeVos has delayed implementing those rules, saying they would create significant costs for taxpayers.

According to a report by the inspector general, DeVos also brought the existing cancellation process to a crawl.

Since Trump's inauguration on Jan. 20, the department has received 25,991 claims for discharging loans. It has denied two requests and approved none, the inspector general, an independent auditor within the agency, found.

That is in contrast to Obama's final months in office. From July 1, 2016, through inauguration, the department received 46,274 claims and approved 27,986. It denied none.

Caught in limbo, borrowers are seeing interest and fees accrue and their credit damaged, the inspector general's report showed. Borrowers could ultimately owe more on a denied discharge than if they had not asked for cancellation and simply continued making payments, the inspector said.

Some state attorneys general have pushed the department to cancel the loans, saying students cannot afford to repay the often-large amounts because the schools did not give them adequate training or a diploma.

The inspector general also found the department did not have a sufficient information system and had to manually retrieve claims data.

"Hundreds of thousands of students were defrauded and cheated by predatory colleges that broke the law, but today's report confirms Secretary DeVos tried to shirk her responsibility to these students and shut down the borrower-defense program, leaving them with nowhere to turn," said Senator Patty Murray, the senior Democrat on the Education Committee.

In a memo to the inspector general, A. Wayne Johnson, chief operating officer of the federal student aid program, said the department has "authorized an interest credit" for long-outstanding claims, will resume reviewing some claims and will soon approve claims for 11,000 Corinthian students.


(Reporting by Lisa Lambert; Editing by Cynthia Osterman)

COMMENTS

More Related News

Back to work: Government shutdown ends after Dems relent
Back to work: Government shutdown ends after Dems relent

WASHINGTON (AP) - President Donald Trump signed a bill reopening the government late Monday, ending a 69-hour display of partisan dysfunction after Democrats reluctantly voted to temporarily pay for resumed operations. They relented in return for Republican assurances that the Senate will soon take up

Democrats, GOP hold out hope for ending government shutdown
Democrats, GOP hold out hope for ending government shutdown

WASHINGTON (AP) - President Donald Trump's budget director is holding out hope that feuding Democrats and Republicans in Congress can reach a short-term spending agreement before the start of the workweek Monday, but he worries that the government shutdown could last for several more days if progress

Trump: Senate should change rules if shutdown stalemate continues
Trump: Senate should change rules if shutdown stalemate continues
  • US
  • 2018-01-21 15:01:08Z

By Susan Cornwell WASHINGTON (Reuters) - U.S. President Donald Trump said on Sunday that if the government shutdown stalemate continued, Republicans should fund the government by changing Senate rules, which currently require a super-majority for appropriations bills to pass. "The Dems (Democrats) just want illegal immigrants to pour into our nation unchecked.

Make No Mistake, Trump's Government Shutdown Is About Racism
Make No Mistake, Trump's Government Shutdown Is About Racism

Lost in the shitstorm over "shithole" was another equally damning example of President Donald Trump's blatant racism and sexism. It was an outward display of a mindset that in many ways has paved the way for the government shutdown we're facing now. Last week, NBC News reported that last fall, the president of the United States asked a career intelligence analyst "Where are you from?" She responded, "New York," and that should have ended the conversation.

Government shutdown begins and so does the finger-pointing
Government shutdown begins and so does the finger-pointing

WASHINGTON (AP) - Americans awoke Saturday to learn that bickering politicians in Washington had failed to keep their government in business, halting all but the most essential operations and marring the anniversary of President Donald Trump's inauguration.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: US

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.