Since President Trump took office, thousands of people who attended demonstrably shady for-profit colleges have applied to have their student loans discharged.
But as of this month, the Trump administration has not approved any of the recent claims, known as borrower defense to repayment applications, including 2,605 claims filed by borrowers from California. So thousands of former students are left in limbo.
The revelation comes via James Manning, acting under secretary in the U.S. Education Department, who was replying to a series of questions from Senator Dick Durbin, an Illinois Democrat who this week published Manning’s early July response.
In total, more than 65,000 claims are pending “review, decision, adjudication,” according to Manning’s letter, with more than 45,000 of those claims associated with students who attended the now-defunct Corinthian Colleges Inc.
The Santa Ana-based company collapsed two years ago after an investigation spearheaded by California lawmakers revealed that the for-profit school presented false job placement figures.
While the Education Department has said it is working with former students who filed before Trump took office to forgive their loans, the process has been slow and the department reportedly hasn’t had a chance to review the new claims. The Education Department did not immediately respond to a request for comment.
Last month, California Attorney General Xavier Becerra and almost 20 other attorneys general sent a letter to Education Secretary Betsy DeVos asking for loans former Corinthian students took out to be discharged automatically. “Defrauded students should not be required to pay the federal government when their schools engaged in unfair or deceptive acts or practices to induce them to enroll,” they wrote.
Becerra’s office estimates that as many as 38,000 Californians are eligible for federal student loan cancellation.
But in June, the Education Department announced plans to halt and rewrite rules the Obama administration had crafted to help defrauded students shed their loan debt. That process could take months, and, although DeVos has said her team will honor claims approved under the Obama administration, thousands of those applicants are still waiting for their loans to be formally discharged.
That wait doesn’t appear to have an end in sight. In his response to Durbin’s questions, Manning said that pending review of the old process for handling claims, no department staff regularly send reports to senior staff or officials on the status of the claims. Instead, he wrote, information is “provided upon request.”
