The Department of Education announced yesterday that students who were deceived by institutions for profit and previously granted partial relief on their direct federal loans will now be granted total relief. The department is filling out a controversial formula, established under the previous secretary, Betsy Devos, who gave some borrowers the forgiveness of partial debt, even if it was found that they were disappointed or deceived by their university.

The change will help 72,000 borrowers with previously approved claims "borrower defender," department officials said, and will result in an additional $ 1 billion in forgiveness of debt, on any forgiveness of debt to those borrowers received previously.

Previously, if the affirmation of a borrower was accepted that they were deceived, Ed loan relief is based on a formula. If the profits of a borrower after graduation were two standard deviations below the median for similar programs, the department granted the borrower full relief. If the borrower's profits were below the median, but not by two standard deviations, the department granted 25, 50 or 75 percent of relief.

Under the Obama administration, the department recommended total relief for borrowers who attended the -profit the CORINTHIAN COLEGE chains and ITT Technical Institute. Devos said that the policies were too generous with taxpayers' money and debuted the formula in December 2019.

Formula detractors criticized it for limiting the amount of borrowers could receive and trust in the Data of profits that were not always informative.

The department said it will make a decision about future claims once they enter, but it will not be using the partial relief formula.

The department will also reimburse the amounts paid on the loans, request that the credit agencies eliminate the negative credit reports and restore the eligibility of the Federal Aid when appropriate. The eligible borrowers will be notified in the coming weeks, officials said.

Miguel Cardona, Secretary of Education, he said in a statement that the borrowers deserve a simple way and just alleviation when they have been harmed by an institution.

"A close review of these claims and the associated evidence showed that these borrowers have been damaged and we will grant a new beginning of their debt," he said.

Consumer defense groups lauded the decision, but said it is needed anymore.

"The defense borrower is a security failure to protect defrauded students who were deceived by their schools and, ultimately, to prevent bad actors from taking advantage of the federal supportive system. . The previous administration turned the borrower's defense into a total farce that was brewed to deny affirmations without any real consideration, "said Toby Merrill, project director of predatory student loans, in a statement. "Leaving partial relief is a strong start for a narrow subset of borrowers, but what we need the Department of Education is a review of the current borrower's defense process."

Whitney Barkley-Denney, Senior Policy Advisor at the Responsible Loan Center, said that the measure is a step in the right direction to help a class of borrowers who are mostly income and people color. "These are borrowers who did what they were told they should do in the search for the American dream," she said. "It was really the school that failed them and partly the federal government to allow these predatory schools to operate."

Barkley-Denney said the Biden administration could go further, which facilitates the Borrower's request. Reimbursement of the defense and restoration of some railing of the Obama Era around the institutions for profit.

"This is really a problem of the federal government that continues giving money to schools that are not doing their work in the education of students in the way in which it is supposed to," she said.

Colleges and universities of professional education, the industry group for institutions for profit, refused to comment

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