Promised college loan forgiveness, borrowers wait
Danielle Ramos’ student-debt nightmare was supposed to be over.
Like thousands of others who studied at failed for-profit colleges, she was promised by the U.S. Education Department under President Barack Obama that her federal loans would be forgiven by now. But as the weeks tick by with no reprieve, the 30-year-old college student fears the financial burden will force her and her 4-year-old son to move back with her parents.
“I’m a single mom, so that’s really scary,” said Ramos, of Framingham, near Boston. “It’s just a lot of uncertainty. I’m probably going to have to rely on family to help me, and it doesn’t feel fair.”
Borrower advocates say the pipeline to loan forgiveness appears to have slowed significantly since President Donald Trump took office, stirring concern that some students may be left in the lurch. Some also see it as a sign that the department is veering from its predecessor’s years of work to rein in fraudulent for-profit colleges.
Education Department officials dispute those claims, saying they’re working quickly to clear a backlog that was inherited from the previous administration.
When Obama left office, 16,453 borrowers were waiting for loan cancellations that already had been approved, and more
than 64,000 others had filed new applications. For months, advocates say, it appeared few or none of those cases were being processed. Democrats in the Senate requested an update from the Education Department in May but say they received no response.
On Monday, the Education Department released data showing that 7,085 of the 16,453 previously approved claims have now been discharged, amounting to $92 million in loans. According to the data, which were provided first to The Associated Press, another 7,300 cases are in the final stages of the process and will be discharged shortly, while the remaining 2,000
are being processed by the department.
Still, the wait has left some borrowers paying for loans that were promised to be wiped clean by now. Some have lost wages and tax returns to debt collectors.
Ramos ran up $15,000 in debt to attend the American Career Institute, a chain of for-profit colleges that abruptly closed in 2013 after she received nine months of training as a medical assistant. Now enrolled at MassBay Community College and working toward a certificate in surgical technology, Ramos says she hasn’t heard any update on her debt cancellation and worries she’ll still have to pay it back.