Students who are defrauded by their schools would have a harder time getting their federal loans erased under new rules proposed by the Trump administration Wednesday.
The proposal, which aims to replace a set of Obama-era rules that were never implemented, drew applause from the for-profit industry but sharp criticism from advocacy groups that represent student borrowers.
Education Secretary Betsy DeVos said the proposal lays out clear rules schools must follow to avoid trouble, while also protecting students harmed by deception.
“Our commitment and our focus has been and remains on protecting students from fraud,” DeVos said.
Under the proposal, students would be eligible for loan relief if they can prove their schools knowingly misled them with statements or actions that directly led them to take out loans or enroll at the school.
That would be a higher bar than the borrower defense rules finalized under Obama in 2016 after the collapse of two for-profit schools, Corinthian Colleges and ITT Technical Institute. Those rules allowed relief in a wider range of cases dealing with breach of contract.
Education Department documents supporting DeVos’ proposal argue that, while students should be protected from fraud, they also have an obligation to do their research before picking schools.
“Postsecondary students are adults who can be reasonably expected to make informed decisions if they have access to relevant and reliable data about program outcomes,” the department said.
