Students who say they have been defrauded by their colleges have waited a long time for these rules
The Obama administration finalized new rules on student loan forgiveness and other student protections from predatory for-profit colleges on Friday. The U.S. Department of Education has been working to revise the way it handles students’ claims that an institution of higher education has defrauded them for over a year.
What is known as “borrower defense to repayment,” allowing students to seek loan forgiveness when they are victims of fraud, has been in place since the 1990s. The statute was rarely used, however, until students attending colleges that were owned by the for-profit college chain Corinthian Colleges began claiming borrower defense to repayment.
Students have made thousands of claims seeking loan forgiveness after attending predatory for-profit colleges.
Corinthian Colleges closed its remaining campuses last year after the department of education said it would fine the chain $30 million for misleading students, alleging that Heald College showed a pattern of falsifying post-graduation data.
It is certainly not the only for-profit college chain to close its doors recently. Education Management Corporation or EDMC, announced a gradual shutdown of 15 of 52 campuses of The Art Institutes in the spring of last year. ITT Educational Services, Inc. officially shut down its academic services in September after the department stopped the company from enrolling students relying on federal student aid after years of federal scrutiny of these schools…