There has been a lot of fraud when it comes to the whole tuition debt forgiveness. Countless for-profit colleges and universities have been complaining about it for a while. Betsy DeVos has stepped up to cut out some of the fraud, making it harder for debts to be completely forgiven.
Rules have been finalized so that it is more difficult for federal student loan borrowers to cancel debt on the grounds that they were defrauded by their college. The scales back considerably on a policy created by the Obama administration focused on how for-profit colleges were abusing the system.
The Trump administration now has a stringent standard for when and how the Education Department will clear out debt from students who have claimed that they were either misled or deceived by a college.
The overhaul, known as “borrower defense to repayment” responds to the conservative criticism of current federal standards. It was too lenient and too expensive for taxpayers, which is why changes had to be made to the standards created by the Obama administration.
While the rules were written following the collapse of the Corinthian colleges in 2015, there were too many other students taking advantage of the system through these rules. It flooded the Education Department with loan forgiveness request.
This is yet another example where Obama failed. He was too quick to change rules that were in place for a reason. It took the Trump administration over a year to way the rules to ensure that they weren’t being too quick to fix something that wasn’t broken.
In the end, they don’t want taxpayers paying for a simple mistake – which is why the fraud is being cut out of the equation.
DeVos has seen too many issues were students raise their hand and receive free money from the government. There is a significant amount of fraud within higher education and it will no longer be tolerated by the Trump administration according to DeVos.
She explains that the rules have been carefully crafted and hold colleges and universities accountable. Students and taxpayers are now treated fairly.
What will the new standards do?
One of the reasons for the tighter standards is to reduce the amount of loan forgiveness. This can add up to more than $500 million every year in comparison to the amount under the policies created by the Obama administration.
The entire set of regulations, which also reduces loan discharges for students where their school has suddenly closed, can save taxpayers over $11 billion across the next decade.
The final policy will take place in July 2020. This will focus on some of the other loan forgiveness standards, though it isn’t as restrictive as DeVos would have liked.
Originally, the Trump administration plan would have had borrowers proving that a college intentionally misled them and would have required student loan borrowers to wait until there was a default on their loan.
However, this would have jeopardized security clearances, credit histories, and more. DeVos said that the proposed rule was based significantly on public input.
It all comes down to protecting both the schools as well as students. If students receive an education and they took out loans in order to get that education, they need to pay for it – it has nothing to do with whether the school closed or not because they can forward those credits to a new school.
The Democrats are playing their typical games of trying to give everyone something for free – and taxpayers are tired of paying for it. This is the constant problem with the Democrats – they have grandiose ideas of how to make something better without giving it a moment’s thought as to how they’re going to pay for it. As such, they raise taxes and underhandedly cheat people out of the money in a different way.
Ultimately, the Trump administration is having to clean up the mess that the Obama administration left behind. There are over 170,000 applications claiming “borrower defense.” Until the Education Department decides how they are going to regulate and establish, claims aren’t being approved or denied.
Borrowers can get their loans forgiven still, though they will need to show the financial harm they faced as well as what kind of misconduct was done by the college in order to trigger some kind of loan forgiveness.
This move protects taxpayers – the Dems simply don’t like it because it puts another smudge on the Obama administration, something that they don’t like to see at any cost.