Students on edge as Trump admin. eyes easing student debt protections
Thousands of students who ran up unpayable debts at for-profit schools are anxiously waiting to see if US President Donald Trump's administration does away with anti-fraud protections put in place by his predecessor Barack Obama.
Some 95,000 cases of former students seeking forgiveness of their debt have been put on hold by the Department of Education, now led by Betsy DeVos, an ardent advocate of for-profit, post-secondary schools.
Most of the cases now on hold involve former students at two giants of the for-profit college industry -- Corinthian Colleges and ITT Tech, which closed in 2015 and 2016.
Students claim they were lured into enrolling in training programs by promises of jobs and diplomas that later proved worthless.
"They laughed at my diploma," said Danielle Adorno, describing the reaction of prospective employers.
The 30-year-old New Yorker wanted to become a baker so she borrowed $25,000 to pursue "culinary studies" at the Art Institute, a private group that ran several schools in the United States, including the one in New York that she attended.
As she tells it, admissions officers used "deflection tactics" to persuade her to enroll, withholding information about graduation rates and how many graduates went on to find jobs.
After nine months of training, Adorno is disillusioned, and has asked the Education Department to forgive her debt.
A rule change made in 2016 under former president Barack Obama allows the Education Department to forgive a student's debt, and then sue the for-profit to recover the money.
The situation came to a head in 2015, when Corinthian Colleges filed for bankruptcy, after receiving a fine from California of $1.1 billion, and a federal one of $30 million for making false and deceptive statements.
At issue now is whether the rule change will be reversed or modified under DeVos, who has ordered a review and frozen the loan forgiveness process.
No requests for student loan forgiveness have been approved since January. The Education Department says it is overloaded with a backlog.
(Source: AFP)
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