Student Loan Forgiveness Program Could See Major Cut
WASHINGTON — A preliminary analysis by the Education Department says payments to students defrauded by for-profit colleges may be cut by about 60 percent under a plan to provide only partial loan forgiveness on some claims.
The agency has said it is discontinuing the Obama administration’s practice of fully wiping out the loans of defrauded Corinthian Colleges students under the so-called borrower defense rule. The department said some students will now get only partial loan forgiveness.
The estimate was in a document drafted last fall and viewed by The Associated Press. Officials looked at student loans forgiven in their entirety to determine the impact if only partial relief had been granted.
A department spokeswoman says the analysis is “not an official calculation” and that it’s too early to make any estimates.