The collapse of for-profit giant Corinthian Colleges, a chain felled by charges of fraud and predatory lending, left students fighting to have their federal loans discharged under a little-known law meant for people just like them. But instead of a clear path to debt relief, many found themselves in an overwhelmly complex process.
New rules the Obama administration finalized Friday aim to change the system, but consumer advocates worry that people already contending with the existing process still face an uphill battle.
The regulations overhaul what is known as borrower defense to repayment, a statute that wipes away federal loans if a school used illegal or deceptive tactics to persuade students to borrow money for college. Few people used the defense until 2014, when Corinthian’s closure ushered in a deluge of claims at the Education Department. That forced the agency to fix the system and create a new standard to judge appeals for debt relief.
Read more at The Washington Post: https://www.washingtonpost.com/news/grade-point/wp/2016/10/28/new-federal-rules-could-make-it-easier-to-have-student-loans-forgiven/