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11-08-2016, 12:07 PM #1Registered User Senior Member
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New Department of Education Rules Makes it Easier to Discharge College Debt
The Department of Education released some borrower defenses rules that allows the Secretary of Education to forgive student loans based on “acts or omissions of an institution of higher education”.
The new rules creates a process (finally!) to allow people to discharge student debt if their college engaged in a "substantial misrepresentation based on a preponderance of evidence". Based on reports I read, misrepresentations include “omissions of information and statements with a likelihood or tendency to mislead under the circumstances.”
These new rules will take effect on July 1, 2017.
I think this is something a lot of us suffering the burden of student debt have been waiting for!
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11-08-2016, 03:17 PM #2Registered User New Member
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About time!
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11-08-2016, 05:26 PM #3Registered User Semi Pro Member
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Will these rules apply only going forward? Or will current borrowers be able to take advantage of them?
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11-09-2016, 08:52 AM #4Registered User Senior Member
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I was reading about this. If you are looking for more information, check out this article from US News.
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11-10-2016, 09:35 AM #5Registered User New Member
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Are these new rules only going to apply to for-profit colleges? Because my college certainly misrepresented my job and income possibilities. I need some protection too.
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11-10-2016, 10:48 AM #6Registered User Senior Member
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That is a great question. I think these rules were written with for-profit colleges in mind. But I do not think they were limited to for-profit colleges.
Originally Posted by BettyA
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11-15-2016, 12:02 PM #7Registered User Senior Member
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It looks like these rules apply to all colleges, whether for profit or non-profit. But it also looks like the college needs to also get into some financial trouble for you to be able to get the discharge in most instances.
There is also a provision to get back a year of Pell grant eligibility.
It is a bit confusing. So we may need to wait some time to see how everything actually works in reality. But it looks like the rules are really trying to address a Corinthian College situation.
You can read more about the rules from this Department of Education summary.
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