Education Department urged to resume loan cancellations

A government watchdog on Monday urged the Education Department to resume the process of forgiving student loans

This image provided by the Education Department shows part of a new web page that will help students choose the right college. Sharply scaling back plans for a government-run college rating system, President Barack Obama is now trumpeting a redesigned online tool that will give students and their parents information about costs, student loans and other data to help them choose among the nation’s colleges and universities. (Education Department via AP)
This image provided by the Education Department shows part of a new web page that will help students choose the right college. Sharply scaling back plans for a government-run college rating system, President Barack Obama is now trumpeting a redesigned online tool that will give students and their parents information about costs, student loans and other data to help them choose among the nation’s colleges and universities. (Education Department via AP)

WASHINGTON (AP) — A government watchdog on Monday urged the Education Department to resume the process of forgiving student loans for tens of thousands Americans who were defrauded by for-profit colleges.

The Office of Inspector General, an independent body within the education agency, recommended in a report that the department restart “review, approval, and discharge process” for defrauded studs.

The group also recommended that the department establish timeframes for considering the claims and “develop controls to ensure timeframes are met.” The report also noted that the department has significantly shrunk the staff of its unit the processes these claims, from 19 contracted staff, on top of attorneys, in November 2016, to just six contracted staff in September 2017.

Liz Hill, press secretary at the Education Department said the report exposed the faults of the Obama administration.

“The OIG report confirms the previous administration did not establish an adequate adjudication process for borrower defense claims,” Hill said in a statement. “The desire to avoid denying claims or adjudicating complicated claims left thousands of students in limbo.

Hill added that Education Secretary Betsy DeVos, is working “to put a process in place that provides a consistent and reliable way to adjudicate pending borrower defense claims, provide fair relief to defrauded students, and also protect taxpayers.”

DeVos has come under criticism for stalling the review of over 95,000 claims for loan cancellations. The agency has not approved a single claim during her time in office and DeVos’ critics charge that she is looking out for the interests of the for-profit industry, rather than colleges. DeVos says she needs time to put together new rules for how loans are forgiven that would be fair to students, but also prevent any potential abuse of the system.

The AP reported in October that the department is considering abandoning the Obama-era practice of full loan forgiveness in favor of partial relief.

The department has halted Obama-era revisions to the process of loan forgiveness that boosted protections for students, citing pending litigation. The agency is now in the process or rewriting those rules with input from educators and experts.

Senator Patty Murray, the top Democrat on the Senate committee overseeing education, said the report confirms that DeVos “tried to shirk her responsibility to these students and shut down the borrower defense program, leaving them with nowhere to turn.”

“Secretary DeVos needs to stop listening to the for-profit executives she hired and start following the recommendations of the Department’s independent watchdog by providing much needed, and legally required, relief to students who were cheated out of their education and savings,” Murray said in a statement.