Full loan relief now a rarity for students at for-profit colleges
Partial forgiveness awards have covered on average about 30 percent of a student’s outstanding loan, with the median loan of roughly $11,500 reduced to about $7,800, according to the data. The department computes the amount erased by comparing their income to peers in similar programs.
The statistics were collected over the summer in preparation for a report on loan relief claims that the agency must submit to Congress. The department has previously not provided such information publicly.
More than 9,000 loan forgiveness claims have been denied under DeVos, according to the data. The Obama administration didn’t issue any denials, but DeVos’ Education Department has said many of the claims that it rejected had actually been identified for denial, but never acted on, by the previous administration.
Asked for comment, Education Department spokeswoman Liz Hill pointed to DeVos’ remarks in December rolling out the partial relief program.
“No fraud is acceptable, and students deserve relief if the school they attended acted dishonestly,” DeVos said at the time.
She said the new process “will allow claims to be adjudicated quickly” and “also protects taxpayers from being forced to shoulder massive costs that may be unjustified.”
Kimberly Fe, 53, studied medical administration and billing at a Corinthian college in California. She said she received poor quality education and was deceived into believing that her credits would transfer to four-year colleges, which wasn’t the case.
The Education Department recently notified Fe that it has forgiven some $2,000 out of $7,000 of her federal student loan.
“It was just a moneymaking machine,” Fe said. “I want my money back, I want my time back.”
The for-profit industry experienced a boom over the past two decades, with enrollment rising from around 230,000 in the early 1990s to a record 2 million in 2010. The sector benefited from federal student loans and the fact that the global financial crisis left many Americans jobless and eager to go back to school to master new skills and get new credentials.
The schools recruited aggressively, often making deceptive statements about job prospects and delivering subpar education, which left many students with meaningless degrees and a mountain of debt.
The Obama administration went hard after the sector, closing down two major for-profit chains, Corinthian and ITT.