Student Loans and For-Profit College Issues

Earlier this week, the U.S. Department of Education (DOE) announced that it will be forgiving nearly $4 billion in student loan debt for students who had previously attended ITT Tech. Loan forgiveness is available to over 208,000 students who attended the for-profit university from January 2005, through September 2016. 

“It is time for student borrowers to stop shouldering the burden from ITT’s years of lies and false promises,” said Miguel Cardona, the U.S. Secretary of Education. “The evidence shows that for years, ITT’s leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs, with no regard for the hardship this would cause. 

While some former students may have already completed Borrower Defense Claims against ITT Tech to have their student debt forgiven, the DOE says this won’t be necessary to receive payment moving forward. No further action is required, and all eligible students will have their loans erased. 

Students have been defrauded for years

This isn’t the first time the DOE has issued a loan forgiveness statement to former ITT Tech students. After the institution closed its doors in 2016 due to being cut off from federal funding, those who had attended the school but never received a degree had their debt erased.

A lengthy investigation into the school revealed that students had been lied to about how their money was used, how much money they’d make after graduating, and how many of their credits would transfer to other schools. 

“ITT defrauded hundreds of thousands of students, as we identified when I was the director of the Consumer Financial Protection Bureau,” said Richard Cordray, the Federal Student Aid Chief at the time. “By delivering the loan relief students deserve, we are giving them the opportunity to resume their educational journey without the unfair burden of student debt they are carrying from a dishonest institution.” 

According to Cardona, the goal moving forward is to make students feel safe and secure when applying to schools and borrowing money. 

“The Biden-Harris Administration will continue to stand up for borrowers who’ve been cheated by their colleges, while working to strengthen oversight and enforcement to protect today’s students from similar deception and abuse,” he said. 

Student loan forgiveness deadline approaching

Federal student loans have been on pause since the beginning of the COVID-19 pandemic in March 2020. After more than two years, consumers only have to wait a few more weeks to learn President Biden’s latest decision regarding loan forgiveness.

The President is scheduled to make an announcement about federal loans on August 31, which has experts speculating about another loan pause or substantial loan forgiveness efforts. 

Student loan borrowers are preparing to resume payments after August 31, the date that a moratorium on payments is set to expire. But the Biden administration is dropping clues that another extension of the moratorium could be in the works.

With the scheduled resumption of payments about a month away, student loan servicers need time to prepare bills and resume their collection efforts. But the Wall Street Journal reports that loan servicers have been told to stand down.

Scott Buchannon, who heads the Student Loan Servicing Alliance, says the U.S. Department of Education has told loan servicers not to communicate with borrowers yet. That’s leading to speculation that the White House plans to either extend the pause on payments or even forgive a portion of the loans.

“The situation is that we’re almost 30 days away from the planned resumption and the department has been telling servicers to hold off on resumption communications for the last few months,” Buchanan told the Journal. “Maybe the department expects that the White House will yet again kick the can down the road.”

Resumption of payments may present challenges

Loan servicers have contracts with the Department of Education to manage the repayment of federal student loans. Under normal circumstances, they communicate with borrowers about how much they owe and when and where to send payments. 

Early in the COVID-19 pandemic, when millions of people lost their jobs, student loan payments were suspended as part of one of the pandemic’s many economic relief programs. About 45 million people in the U.S. hold student loan debt. According to the New York Federal Reserve, 67% of student loan debt is owed by people under 40.

That age group is the top household formation demographic, but many have struggled to purchase homes because of student loan debt, which currently totals more than $1.5 trillion.

In March, the New York Fed issued a report warning that it expects a rise in student loan delinquencies whenever the moratorium expires. It noted that very few federal student loan borrowers made voluntary payments during the moratorium. It also said people with private student loans, which were not covered by the moratorium, have struggled to make payments.

Some in Congress, led by Sen. Elizabeth Warren (D-Mass.), have pushed the White House to forgive a large portion of student loan debt.

The Federal Trade Commission (FTC) is reminding student loan borrowers that they have until October 31 to submit an application for the Public Service Loan Forgiveness (PSLF) Limited Waiver. The waiver has already proven its worth to thousands of student loan borrowers who have used it to get closer to total loan forgiveness. 

The FTC says there are two groups that the waiver benefits the most: (1) people who have Federal Direct Loans or can consolidate other types of federal student loans into a Direct Loan by October 31; and (2) those who have a work history with qualifying public service employers.

Until that October 31 deadline, securing a waiver gives borrowers credit for repayment periods that previously wouldn’t have counted. Those would include the following times:

• When a borrower didn’t make a payment

• When a borrower didn’t make a payment on time

• When a borrower didn't pay the full amount due 

• When a borrower wasn't on a qualifying repayment plan

The steps to take advantage of the waiver

Here’s the short version of how consumers can take advantage of the waiver:

• Log into the borrower’s Federal Student Aid account. The borrower should use their Federal Student Aid ID to access Studentaid.gov and complete the PSLF Limited Waiver requirements.

• Submit the PSLF form. Consumers can use the PSLF Help Tool to verify the current and past employment that they want credit for and submit the PSLF form.

• Confirm (or consolidate into) Direct Loans. The waiver only applies to Direct Loans, so borrowers need to consolidate their existing federal loans by October 31, 2022. The process is free through studentaid.gov. If someone is unsure about what types of loans they have, all they have to do is take a look at their FSA Aid Summary.

If there are questions that the instructions for those steps don’t answer, borrowers can go to StudentAid.gov's comprehensive list of FAQs to help find the answers they’re looking for.

The U.S. Department of Education is wiping the slate clean for 560,000 students who borrowed money to attend Corinthian College. The agency announced that it is discharging all those students' remaining federal student loans, an amount that equates to $5.8 billion.

The Department said the discharge will include everyone, even borrowers who have not yet applied for a borrower defense discharge. The discharge will be done automatically without any additional action from borrowers.

Addressing a longstanding problem

It took nearly three administrations to make this happen, but the Corinthian students have the Biden-Harris White House to thank for their loan discharges. Officials have cited an ongoing commitment to helping student loan borrowers get the relief they are entitled to. With the Corinthian action on the books, the administration has approved $25 billion in loan relief. 

Bringing Corinthian to justice has been a personal crusade for Vice-President Harris. She sued the institution when she was the attorney general of California in 2013, claiming that the for-profit college purposely misrepresented its job placement rates and was engaging in deceptive and false advertising and recruitment. 

"As of today, every student deceived, defrauded, and driven into debt by Corinthian Colleges can rest assured that the Biden-Harris administration has their back and will discharge their federal student loans," said U.S. Secretary of Education Miguel Cardona. 

"For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep. While our actions today will relieve Corinthian Colleges' victims of their burdens, the Department of Education is actively ramping up oversight to better protect today's students from tactics and make sure that for-profit institutions – and the corporations that own them – never again get away with such abuse."

The Department says it’s not finished

The Department of Education made it clear that its efforts to clean up the whole student loan mess doesn’t stop here. Last week, it announced a revamp of its student loan program in hopes of getting students and loan borrowers a full slate of benefits, including loan discharges.

If it sticks, the promises the Department makes could forever change the student loan business -- from making student loans more affordable to preventing a future debt crisis by holding colleges liable for leaving students with mountains of debt and without good jobs.

The Department also recently announced fixes to longstanding problems with income-driven repayment that will help thousands of borrowers receive forgiveness through that program, as well as 40,000 borrowers who receive Public Service Loan Forgiveness (PSLF).

Chalk up another move in the right direction for student loans. In hopes of providing federal student loan borrowers with a 21st-century customer experience, the Department of Education’s (DOE) Federal Student Aid (FSA) office has announced that it is building out a long-term loan servicing solution called Unified Servicing and Data Solution (USDS).

The DOE says it has high expectations for loan servicers going forward, including hitting two key objectives – reducing borrower delinquency and default.

Servicers have little more than a year and a half to get their act together, as the current loan servicing contracts are set to expire in December 2023. As it stands now, loan servicers support borrowers through their time in school and then as they repay their loans. The rub is that each servicer does its own thing – they each have their own website, contact center, staff training protocols, and borrower outreach programs. 

In the DOE’s eyes, the whole system is a can of worms that confuses borrowers. The agency said this fragmented approach has created several issues for the FSA, as well as customers and partners. 

“Frankly, the quality of work has not always met our standards,” said FSA COO Richard Cordray. “Borrowers are understandably frustrated when they receive inconsistent information about something as important as their student loans. Too often, borrowers miss out on available repayment options, and millions have defaulted as a result. More than 35 million borrowers with federally managed student loans are counting on us to help them achieve their life goals through higher education.”

What borrowers can expect

The USDS’ pecking order is pretty straightforward. The first thing it will do is replace the legacy servicing contracts for Direct Loans and federally managed Federal Family Education Loan (FFEL) Program loans with these goals as its target:

• Providing all federally managed borrowers with complete account management capabilities on StudentAid.gov;

• Reducing the disruption of account transfers; and

• Increasing servicer accountability to reduce loan delinquencies and defaults and other customer service benchmarks through clear, measurable service-level agreements.

FSA officials said they have already taken a couple of important steps to implement the next generation of loan servicing. One is the Next Gen FSA initiative, which is designed to check off the modernization goal.

Another is making it easier for borrowers to find what they’re looking for in one place. To that end, the agency says it continues to refine its Digital and Customer Care (DCC) platforms, which include the StudentAid.gov website and a data platform called the Enterprise Data Management and Analytics Platform Services.

The agency said the clock has already started ticking and hopes to have everything in place within five years of the go-live date. In the meantime, borrowers should see some incremental improvements. Officials plan to enhance servicing functionality through a single FSA-branded interface, by building out a servicing data repository to improve the account transfer process, and by enhancing cybersecurity.

Just how serious is President Biden about student loan debt? He says he's thinking about forgiving a chunk of what borrowers have taken on to get an education, but not to the tune of $50,000 per borrower like some of his fellow Democrats have been urging him to do.

"I am considering dealing with some debt reduction," Biden said on Thursday in response to a question raised at a White House briefing. "I am not considering $50,000 debt reduction. But I'm in the process of taking a hard look at whether or not there will be additional debt forgiveness."

The president didn’t leave it at that, though. He said he would have a complete answer to that question sometime in the "next couple of weeks."

So, where did the $50,000 forgiveness figure come from? Hoping to help grease the possibilities for Democrats in the upcoming midterm elections, Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-MA) belabored the point, asking the president to up the ante and cancel $50,000 in student loan debt.

Finding a solution that works for everyone

There’s a fine line between being proactive and being overly generous, and Biden is trying to find it with the student loan issue. During his run for the Oval Office, he vowed that he would erase $10,000 in student loan debt and challenged Congress to take action.

Once he got into the White House, advisors stepped in and cautioned that the president could face legal challenges if he spread the student debt cancellation too far. Biden asked his team to give him the best options, and the answer he promised soon should tell us where the sweet spot is in that regard. 

Biden has to be careful not to set any expectations for future student loan borrowers, suggests Michael Heberling at the American Institute for Economic Research. "Will this really be just a 'one-time' gift? Doubtful!," he said. 

"The students who follow in the years to come will borrow with the understanding that their $10,000 relief will be there as well. After all, it’s only fair. This situation highlights Planer’s Rule (Similar to Murphy’s Law): An exception granted becomes a right expected the next time it is requested."

How about another extension?

The nudge to move the student loan issue forward also came up at a closed door meeting with the Congressional Hispanic Caucus earlier in the week. Among the concerns presented at the meeting, Congressman Tony Cárdenas (D-CA) asked the President to address student loan debt.

Cárdenas said he asked Biden to extend the moratorium past its current Aug. 31 expiration date. “Well, Tony, I’ve extended it every time,” the president responded. Pushing Biden a little harder, Cárdenas then asked the president for another favor – issue an executive order to alleviate at least $10,000 in student loan debts per person. 

Cárdenas emphasized that the situation is particularly burdensome with the Latino community. He told Biden that Latinos in the U.S. who are still trying to pay off student debt aren’t getting very far. Cárdenas said that despite their efforts, Latinos have more than 80% of their bill due after more than a dozen years.

The college application deadline is closing in, and high school seniors are making their final decision on where to attend. But a sobering new survey suggests that applicants should think long and hard about how they will pay for their education.

In a survey conducted for Givling, a crowdfunding trivia game that helps users eliminate debt, 63% of people who attended college said they regret taking out student loans. The survey showed that nearly half of the respondents paid their student loans for 10 years or longer.

Nearly 25% reported that their current student loan balance is more than $70,000. Asked if they would do it again, 27% of respondents said the return on investment isn’t enough to justify their debt.

"The student debt crisis has surged 144% over the past decade, forcing 45 million Americans to shoulder more than $1.5 trillion in loans," said Laurie Farros, president of Givling. "While programs like PSLF (public service loan forgiveness) certainly help, unfortunately they don't go far enough.”

While elite schools tend to be the most expensive, the Wall Street Journal reports that getting into one of them has never been harder. For example, Harvard received a record 61,220 applications for entry this fall and has accepted just 1,954.

Is where you go to school important?

Getting a good job usually requires a bachelor’s degree, but it’s not clear whether getting a degree from an expensive college provides much of an advantage. The majority of business leaders who recently responded to a Gallup poll said it was not very important or not at all important where the candidate went to college.  

What students major in may also be less important than many students think. The same poll found that only 28% of business leaders thought a candidate’s college major was very important.

This suggests that students who are planning to attend college should give a higher priority to how much the education will cost. In the last three decades, the cost of a college education has risen much faster than the rate of inflation. 

According to Investopedia, the average college student has over $40,000 in student loan debt.

When students consider a college or university, they often consider what experts say are the best institutions of higher education. On both of its annual lists of the best colleges in the world and the U.S., AcademicInfluence.com has ranked Harvard as the top option.

But picking a college is a big decision – and a very expensive one – so a lot of personal and individual considerations should go into the choice. Jed Macosko, a physics professor at Wake Forest University and president of AcademicInfluence.com, advises students to pick a school that closely matches their interests.

“For example, if you are interested in pre-med, engineering, or business, you can find the schools that other students with those same interests have selected,” Macosko told ConsumerAffairs. “If these students, whose interests match yours, have been accepted at more than one college, their choices can really show you which schools are considered the best for those fields, and often there’s a lot of collective wisdom that can be gained by looking at big data.”

Financial fit

Mark Kantrowitz, the president of PrivateStudentLoans.guru, says students should look for a financial fit as well as an academic fit because of the huge cost of a four-year degree. That involves avoiding unreasonable student loan debt.

“Student loan debt is reasonable if it can be repaid in ten years,” Kantrowitz told us. “If total student loan debt at graduation is less than the student's expected annual starting salary, it can be repaid in ten years or less.”

Dr. Adedayo Akande, president of University of Health Sciences Antigua, agrees that matching a college with the student’s academic interests is an important consideration. He also says students should not overlook some of the benefits of starting their education at a community college.

"Smaller class sizes offered at community colleges allow students to have more personalized attention when compared to larger universities,” Akande said. “Another pro (advantage) is that community colleges typically offer a lower cost of education while courses can be easily transferred upon joining a university."

Check the important boxes

Neeta Vallab, the founder of MeritMore, which helps students manage the admissions process, told us that students should start with a list of colleges that check important boxes for them. That might include things like area of study, location, size, mentorship opportunities, and out-of-pocket expenses. 

“Secondly, a student should also consider the strength of the alumni network, quality of career placement services, and scope and quality of experiences outside of the classroom,” she said. “As a student researches colleges and narrows the initial list, they should still go into the process applying to multiple colleges as this will give them the opportunity to make a choice from various offers.”

How many different applications should a student file? Vallab says seven is a good number to start with, but students may consider up to 20 colleges and universities. If a student receives acceptance letters from multiple institutions, Vallab says they should evaluate all of the offers to determine the best fit, both academically and financially.

The Consumer Financial Protection Bureau (CFPB) says it will begin to more closely scrutinize the procedures that post-secondary schools, such as for-profit colleges, use to extend private loans directly to students.

Going forward, the CFPB says its new procedures will take a hard look at several aspects of the student loan process, including placing enrollment restrictions on applicants, withholding transcripts, improperly accelerating payments, failing to issue refunds, and maintaining improper lending relationships.

The agency’s effort is another layer of protection that the U.S. is affording student loan borrowers. Just last week, Navient – one of the largest student loan lenders in the U.S. – came to an agreement with 39 state attorneys general over allegations that it wrongly led borrowers into taking on predatory and high-cost loans. 

“Schools that offer students loans to attend their classes have a lot of power over their students’ education and financial future,” said CFPB Director Rohit Chopra. “It’s time to open up the books on institutional student lending to ensure all students with private student loans are not harmed by illegal practices.”

What’s the biggest rub for the CFPB? The agency stated that many of the loans it's taking a harder look at have a potential for abuse because they are made outside the supervision of the Department of Education, with many being connected to banks, non-profits, nonbanks, credit unions, state-affiliated organizations, for-profit schools, and non-profit schools. Officials pointed to past abuses at schools like Corinthian Colleges and ITT Tech as cases in which students were subjected to high-interest rates and strong-arm debt collection practices. 

What student loan borrowers can expect

With Congress’ backing, the CFPB now has supervisory authority over entities that originate private education loans, including institutional loans. In addition to looking at general lending issues, CFPB examiners will be looking at the following:  

• Placing enrollment restrictions: Students who are late on their loan payments may be restricted from enrolling in or attending classes, which could delay their graduation and prevent them from finding employment.

• Withholding transcripts: When a school withholds academic transcripts from students who owe the school money, this prevents them from using their transcripts to demonstrate their education levels in the job market.

• Improperly accelerating payments: Schools that use acceleration clauses in their loans when a student withdraws from the program could be putting a heavy financial burden on them by making their loans immediately due and collectible.

• Failing to issue refunds: If a borrower withdraws from a program early, they may be entitled to some refunds by the school.

• Maintaining improper lending relationships: Schools that have preferential relationships with certain lenders may pose risks to students because they may end up paying more for their loans.

To help students and their families get a better grip on how to tackle their student debt, the CFPB has created a new online resource center called “Paying for College,”  It also wants student loan borrowers who are experiencing problems related to repaying student loans or debt collection to know that they can submit a complaint to the agency.

ConsumerAffairs recently researched the student loan landscape and has produced a guide that covers everything from differences between lenders to rates and terms. That guide is available here.

If Sen. Rand Paul (R-KY) gets his wish, student loans could soon be fully tax-deductible. Paul says he plans to introduce the Tax Free Education Act, legislation that could change the face of student loan programs forever if passed.

In comments made to WDRB-TV in Louisville, Ky., Paul said his five-prong approach would include the following:

• Make education expenses 100% deductible

• Enable students to deduct the cost of their education from their income tax

• Include student loans as “education expenses”

• Apply to all colleges and technical schools

• Apply to the cost of K-12 education

The rising cost of education is important to Paul. Less than two years ago, he introduced the Higher Education Loan Payment and Enhanced Retirement (HELPER) Act, a pro-taxpayer plan that he said would help Americans pay off their student loan debt more quickly and easily, plus give them an added opportunity to save more money for retirement.

"Making college tax deductible, I think, would help a lot of families," Paul said. "A lot of families are struggling. College tuition has doubled over the last decade. Loan payments are going up. I meet people in their 30s still trying to pay back their loans."

Student loans: a can of worms

We’re now in the fourth year of a prolonged battle over student loans, dating back to 2017 when a coalition of states pushed Trump Education Department appointee Betsy DeVos to take action on 25,000 loan forgiveness applications filed by students who were left stranded when for-profit schools like Corinthian Colleges collapsed.

After DeVos left that can of worms on her desk for her successor, the new Biden-appointed Education Secretary Dr. Miguel Cardona quickly forgave more than a billion dollars coming from 72,000 eligible claims from student borrowers -- the majority of whom attended Corinthian Colleges and ITT Technical Institute.

That’s a nice start, but there’s still work to do. According to the Education Data Initiative’s deep dive into the situation, there’s still a lot to shore up -- including addressing the variety of loan forgiveness programs that have different qualifications, forgiveness amounts, and qualifications. 

Unfortunately, the process of making improvements has been painfully slow. In the last two years, the number of denied claims has more than quadrupled, and as many as 43% of applications have not yet been processed.

What about the for-profit schools still in business?

Another item on Cardona and Paul’s checklist might be to help students who have loans from for-profit institutions that are still in business. As an example, ConsumerAffairs reviewer Marnie from Massachusetts pegged Capella University for the problems she’s been fighting. 

“Terrible! They took $82K from me without even knowing about it with student loans so they could profit! I am getting a lawyer against Capella AND Nelnet. If you think after 15 years I am going to pay all of YOUR FRAUDULENT money back when I wasn't even able to graduate after seeing my bill, you're nuts,” Marnie wrote.

Another frustrated for-profit college student loan borrower -- Melissa of Maryland -- says she’s still trying to sort things out with Strayer University. She accused the institution of taking her money but then changing the name of the program she completed.

“Called the dean to advise. Was told he would get it straight. Received a email advising the program was switched to Business ADMIN. from HR. I took out student loans to receive a degree in HR not Business. I could have went to another school and Received the degree I wanted. Now stuck with over 50k in student loans with no job in HR,” she wrote.

It’s a drop in the bucket of the $1.6 trillion in outstanding student loan debt, but students who borrowed money to attend the now-defunct ITT Technical Institute got some relief on Friday. 

The U.S. Department of Education said those who attended the school but never received a degree are getting their remaining student debt forgiven.

After a new review of the issues that led to ITT Tech closing its doors, the agency announced that it will make $1.1 billion in closed school discharges available to an additional 115,000 borrowers -- 43% who are believed to be in default. The only stipulation those borrowers have to face is that they did not complete their degree or credential and left ITT Tech on or after March 31, 2008. 

Friday’s action brings the total amount of loan discharges approved by the Department since January 2021 to $9.5 billion -- a welcome relief to more than 563,000 student loan borrowers.

"For years, ITT hid its true financial state from borrowers while luring many of them into taking out private loans with misleading and unaffordable terms that may have caused borrowers to leave school," said U.S. Secretary of Education Miguel Cardona. 

"Today's action continues the Department's efforts to improve and use its targeted loan relief authorities to deliver meaningful help to student borrowers. At the same time, the continued cost of addressing the wrongdoing of ITT and other predatory institutions yet again highlights the need for stronger and faster accountability throughout the federal financial aid system."

Steps former ITT Tech students need to take

According to Education Department regulations, former ITT Tech students who have outstanding student loans need to know the following:

• They are eligible for loan relief if they attended an ITT-owned institution that shut down between November 1, 2013, and July 1, 2020.

• If they meet the above requirement and did not enroll in another institution within three years of their school closing down, they will receive an automatic loan release.

• Borrowers who enrolled elsewhere but did not complete their program of study may still be eligible for a discharge, but they will need to submit an application.

Borrowers can access the closed school discharge application by contacting their servicer or visiting StudentAid gov/closedschoolform and returning a completed application to their servicer.

The Department will begin processing discharges in September 2021, and borrowers will start receiving automatic discharges soon thereafter.

The U.S. Education Department has announced that it will begin automatically canceling the student loans of more 323,000 severely disabled borrowers. 

In a statement on Thursday, the agency said it will start discharging the debt of borrowers who are unable to maintain gainful employment due to a permanent physical or psychological medical impairment. The action will take effect starting in September.

"Today's action removes a major barrier that prevented far too many borrowers with disabilities from receiving the total and permanent disability discharges they are entitled to under the law," said U.S. Secretary of Education Miguel Cardona. "From day one, I've stressed that the Department of Education is a service agency. We serve students, educators, and families across the country to ensure that educational opportunity is available to all.” 

Burdensome rules

The action is being carried out through the Total and Permanent Disability (TPD) discharge program. While the move is intended to help many struggling borrowers, critics have argued that potential beneficiaries may face challenges in submitting a formal application. Some may even be unaware that they qualify. 

“We've heard loud and clear from borrowers with disabilities and advocates about the need for this change and we are excited to follow through on it,” Cardona said. “This change reduces red tape with the aim of making processes as simple as possible for borrowers who need support."

More than $5.8 billion in debt will be wiped out as a result of the move, the Education Department said. The changes introduced today will go into effect starting in September, and all of the loans are expected to be discharged by the end of the year.

The Biden administration has announced that it’s erasing $500 million in student loan debt for 18,000 former ITT Tech students. 

ITT Tech was shut down in 2017 after the government revoked its federal funding and decided that the for-profit institution had cheated students out of money. The Department of Education said Wednesday that the school misled students about how much they could expect to earn after graduating, as well as how their credits would transfer to other schools.

Education Secretary Miguel Cardona said the action comes with a promise that the Department will continue to stand up for students who were misled by their schools. 

"Our action today will give thousands of borrowers a fresh start and the relief they deserve," Cardona said in a statement. "Many of these borrowers have waited a long time for relief, and we need to work swiftly to render decisions for those whose claims are still pending."

Entitled to relief

In March, the Department of Education announced that it would cancel $1 billion in student loan debt for about 73,000 defrauded students of Corinthian Colleges and ITT Technical Institute. 

An official said a review of Betsy DeVos’s guidelines dealing with student loan relief did not grant an “appropriate level of relief to borrowers” and added that there was “clear evidence” that they had been taken advantage of.

“It has been more than four years since the Department of Education first concluded that these students had been cheated by their institutions and were deserving of full debt relief,” Education Department Chairman Robert C. “Bobby” Scott (D-VA) said. “Unfortunately, instead of simply processing loan forgiveness claims, the previous administration refused to accept the findings of its own staff and suspended action on behalf of these defrauded borrowers.”