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December 22, 2017

Education Secretary Betsy DeVos is scrapping the Obama administration's plan to forgive the loans of students defrauded by the for-profit chain Corinthian Colleges, adopting a new process that she says will be more efficient.

Corinthian had two campuses in Massachusetts when the chain shut down, leaving thousands of students in limbo.

The Obama administration had promised to erase their loans because Corinthian made fraudulent claims about job placement and graduation rates.

At first, DeVos said the Education Department would keep that promise. Then, earlier this year, she put the Obama policy on hold. Now she says the department will look at the average incomes of former Corinthian students and then decide whether to forgive their loans in full or in part.

"We have been working to get this right for students since day one," DeVos said in a statement. "No fraud is acceptable, and students deserve relief if the school they attended acted dishonestly. The improved process will allow claims to be adjudicated quickly and harmed students to be treated fairly. It also protects taxpayers from being forced to shoulder massive costs that may be unjustified."

Massachusetts Attorney General Maura Healy, who last week filed a complaint against DeVos for failing to discharge the loans, is criticizing the plan. Healey tells WGBH News the recent move does not satisfy her concerns.

"Since last January, we've had collectively across this country a hundred thousand applications for loan discharges sitting idle in a drawer at the U.S. Department of Education, and behind every single application is a student who has been victimized," Healey said. “What [DeVos] came out with the other day was just another attempt to deprive students of the relief that they are already entitled to under the law. It's another attempt to the for-profit school industry."

Healey has charged the Education Department with garnishing former Corinthian students' wages and intercepting their tax returns.

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