“Defrauded Students Will Stay Indebted”

Courthouse News reports:

Education Secretary Betsy Devos need not provide full debt relief to more than 60,000 defrauded students, but she must stop collecting on their loans, a federal judge said in court Monday.

Lawyers for a proposed class of borrowers had asked U.S. Magistrate Judge Sallie Kim to revive an Obama-era policy that promised full debt forgiveness to students defrauded by the now-defunct, for profit Corinthian Colleges.

Last month, Kim issued an injunction temporarily voiding the less generous debt relief formula enacted by Devos in December 2017 and ordering the Education Department to stop collecting on those loans.

During a court hearing Monday, Kim sided with the federal government’s position that returning to the “status quo” means delaying processing claims for debt relief, not going back to the Obama-era policy of forgiving all loan debt.

At the same hearing, the judge also heard argument on the government's motion to dismiss a separate lawsuit filed by the state of California challenging the Education Department’s refusal to provide full and immediate debt relief to defrauded students. The government argues that the state lacks standing.

The full article is here.

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