The Education Department didn’t grant a single claim for loan forgiveness to people who said they were defrauded by their colleges between June and December 2018, according to data sent to Congress and provided to CNN on Friday.
While Education Secretary Betsy DeVos told senators on Thursday that her department had restarted loan forgiveness to defrauded students, the data shows it did not immediately start doing so despite an October court order.
More than 158,000 people are waiting to hear whether their debt will be canceled, according to the Education Department data, which wassent to Washington Democratic Sen. Patty Murray’s office on Friday.
Many borrowers have been waiting for their claim to be processed for years as DeVos fought to block a rule known as Borrower Defense to Repayment from going into effect. It allows students to apply for debt cancellation if they were defrauded by their college – but DeVos wants to rewrite it to ensure taxpayers aren’t on the hook for students who weren’t actually harmed by their schools.
The rule applies to students whose colleges made inaccurate claims or misled them about the success of their programs. It covers nursing students, for example, who found out after finishing their program that it didn’t have the right accreditation – keeping them from getting a job.
Applicants typically are required to show that the school misled them – by presenting them with inflated job placement rates, for example.
In September, a federal court sided with Democratic attorneys general from 18 states and Washington, DC, and ordered immediate implementation of the rule in October.
At Thursday’s budget hearing – where DeVos was also blasted for proposing a cut to the Special Olympics – the secretary said she did not know how many claims had been processed in the past five months.
“Has the department approved even one Borrower Defense claim since that court order,” Murray asked.
“I believe so. We are reviewing them regularly. I don’t have the specific number,” DeVos responded.
“We are continuing to review the appropriate steps based on the judge’s request that the 2016 regulation be implemented, while at the same time we are continuing to work on revising the regulation,” DeVos added.
The department had previouslyreleased data on Borrower Defense claims through September, before the court order. The new information was sent to the senator as part of a regular quarterly report, and not in response to her questions at the hearing.
“It appears to me we haven’t moved forward at all on this and that’s not fair to the students or their families or their future,” Murray said.
It’s possible that the Department of Education has processed some claims in 2019, but it did not confirm when asked by CNN on Friday.
“The department expects to post updated information about the federal student aid programs, including borrower defense claims, in the coming weeks,” a spokesperson said in an emailed statement.
The number of Borrower Defense applications soared as the Obama administration cracked down on for-profit colleges.
In December, the department announced that it would begin canceling loans for borrowers eligible for a specific type of loan cancellation. There is an automatic loan discharge for those whose schools closed while they were enrolled.
As of March 1, the department has forgiven more than $168 million in debt to about 16,000 borrowers that qualified for a closed-school discharge, according to data the National Student Legal Defense Network obtained from the Department of Education in connection with a lawsuit. The group sued the department in November for allegedly continuing to collect on these loans.
About half of the debt forgiven was owed by borrowers who attended one of the now defunct for-profit Corinthian Colleges.
But borrowers who aren’t eligible for the automatic discharge are still waiting to hear the verdict on their claim.
At the hearing on Thursday, Illinois Democratic Sen. Dick Durbin asked DeVos why it was taking so long for the department to give defrauded students a break.
“Don’t you have a heart?” he asked.
“Senator, no student should be defrauded, and if fraud is involved, there are consequences and there will be consequences,” DeVos responded.
