Student debt, which now totals more than $1.3 trillion, is a debilitating hardship for millions of students and families. While presidential candidates will surely debate the issue all summer long, many people may not realize that a key battle over how and when student loans can be legally canceled is already underway.
On Monday, the Department of Education released a proposed rule providing a pathway to debt cancellation for students who were defrauded by a for-profit college. Unfortunately, the proposal, which is not yet final, will make it difficult for student debtors to get relief, even when the law is on the side of students.
Student loans are especially burdensome for for-profit college students, a disproportionate number of whom come from low-income backgrounds and are the first in their families to attend college. For-profit schools lure students with a high-pressure sales pitch to get them to enroll in sham degree programs. Then they load them up with debts they can never repay. For-profit schools enroll only 10 percent of all students but account for 40 percent of defaults.
Students from for-profit colleges have been leading a campaign for debt relief for well over a year using a rarely used law called Defense to Repayment which requires the Department of Education to cancel loans held by students who were defrauded by their school.