California sues Dept. of Education over student debt relief claims

California sues Dept. of Education over student debt relief claims

"What Secretary DeVos is doing is unconscionable", Becerra said in a statement. "It is hard to believe that we are forced to sue the Department of Education to compel Secretary DeVos to carry out the department's legal duty and help these students rebuild their lives".

DeVos is rewriting the borrower defense to repayment rule, which was created after the collapse of Corinthian Colleges in 2015 to give students who were cheated a way to get their federal loans forgiven.

Attorneys general argue that even if a Corinthian student has not filed a claim or sought forbearance, the federal government can not legally collect on that debt because the Education Department found evidence of fraud.

DeVos and the department have endured withering criticism from advocacy groups, liberal lawmakers and a federal watchdog for letting defense claims pile up. Although the Department of Education granted 28,000 claims between 2015 and January 20 of this year, the Trump administration stopped processing the claims this year as it re-examined the existing process for ruling on applications. Both spent their final days enveloped in state and federal investigations and lawsuits over alleged fraud, deceptive marketing and steering students into predatory loans.

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In 2013, the California Attorney General's Office led the charge against for-profit Corinthian Colleges and its subsidiaries, seeking to put an end to abusive practices that left students under a mountain of debt and far too often without the jobs Corinthian had falsely promised its degrees would provide.

The Education Department's Inspector General said this week the agency has stopped cancelling the student-loan debt of people defrauded by failed for-profit schools, Reuters reported.

The California Attorney General's Office was instrumental in moving the Department of Education to implement a borrower-defense process to grant widespread, expedited loan relief to defrauded Corinthian borrowers.

Legislation passed in the wake of the devastating storms-the Hurricanes Harvey, Irma, and Maria Education Relief Act of 2017-provided the flexibility for the Department to award the supplemental funds to impacted schools, as well as impacted students. Former Corinthian students can log on to to find out if they are eligible to use this streamlined process. The agency has in the past described other lawsuits filed by Democratic attorneys general as a partisan attack on the Trump administration. On the same day, the attorneys general of Massachusetts, New York, and IL, all Democrats, filed a separate lawsuit alleging that the Trump administration is violating federal law by refusing to hand down decisions on pending claims, the Washington Post reported.

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