https://www.nationalreview.com/2018/08/betsy-devoss-loan-forgiveness-rule-slimed-by-college-cartel/
The new standard is clearly better for colleges, taxpayers, and students who are willing to repay their debts.
Secretary of Education Betsy DeVos has issued new guidelines on federal student-loan forgiveness in an attempt to more sensibly balance the rights of borrowers and taxpayers. Predictably, the higher-education cartel and its media allies were aghast. The New York Times headlined its story “DeVos Proposes to Curtail Debt Relief for Defrauded Students.” Other headlines included “Betsy DeVos’ Message to Students: You Have the Right to Be Ripped Off” and “Betsy DeVos’ New Proposal Aligns Her With For-Profit Colleges Over Debt-Saddled Students.” The Center for Responsible Lending’s Ashley Harrington huffed that the proposal was “a roadmap for institutions seeking to abuse students.”
What made this so bizarre, even by the standards of the mud-slinging higher-education debate, is that it’s unclear whether all students seeking loan forgiveness have actually been defrauded. Indeed, the impetus for DeVos’s action was the likelihood that the previous rules, put forward under President Obama, were going to put taxpayers on the hook for billions to bail out students who hadn’t been victimized.
Certainly, one can quibble about the particulars of the new rule — including an unfortunate and arbitrary provision stipulating that only borrowers who enter into default can apply for borrower defense. But to allege, for example, that DeVos is curtailing “Debt Relief for Defrauded Students” is to beg the key question.
The new guidance concerns a provision of the federal student-loan program known as “Borrower Defense to Repayment.” This is a mechanism for forgiving the loans of students who attend colleges that engage in fraud, such as by misrepresenting program information or future employment and earnings. So far, so good.
The problem is that the Obama administration, as part of its larger crusade against for-profit colleges, issued guidance that created an astonishingly far-reaching definition of fraud — opening the floodgates for across-the-board loan discharges, at taxpayer expense, if “public interest” minions could show merely that colleges made modest, inadvertent mistakes in marketing or advertisements.