Education Department Pays Partial Student Loans in Majority of Cases

Education Secretary Betsy DeVos

The Education Department is partially paying for loans of college students defrauded by for-profit colleges.

The Figures

So far, under Betsy DeVos, the current education secretary, the department has approved 16,000 claims of fraud. Of those 16,000 claims, it paid for 1,000 loans in full and paid partial credit for 15,000 loans. It also denied 9,000 claims.

On average, payouts for partial loan credit cover 30 percent of the current loan balance. The median loan amount students file for is $11,500. After the department pays 30 percent of that amount, students are left with a $7,800 balance.

How does DeVos’ policy determine who gets what? The department bases its decisions on how much students are earning after they complete their school’s program. This is a change from Obama-era regulations. Then, students qualified for full loan payment once the department determined that schools had lied during their recruitment process.

Critics of DeVos’ Policy Change

Many see DeVos as favoring schools over students. They point out that DeVos hired officials from for-profit schools to join her department. They also remind us that the Obama administration didn’t deny any claims.