College Borrowers Promised Loan Forgiveness Are Left to Wait - NBC New York

College Borrowers Promised Loan Forgiveness Are Left to Wait

Attorneys general from 17 states and Washington, D.C., have told Education Secretary Betsy DeVos that delay was harming borrowers



    Paying Off Student Loans

    Consumer Reporter Lynda Baquero helps a woman who works at a non-profit organization figure out her student loan debt.

    (Published Thursday, May 4, 2017)

    Danielle Ramos' student-debt nightmare was supposed to be over.

    Like thousands of others who studied at failed for-profit colleges, she was promised by the U.S. Education Department under President Barack Obama that her federal loans would be forgiven by now. But as the weeks tick by with no reprieve, the 30-year-old college student fears the financial burden will force and her 4-year-old son to move back with her parents.

    "I'm a single mom, so that's really scary," said Ramos, of Framingham, near Boston. "It's just a lot of uncertainty. I'm probably going to have to rely on family to help me, and it doesn't feel fair."

    Borrower advocates say the pipeline to loan forgiveness appears to have slowed since President Donald Trump took office, stirring concern that some students may be left in the lurch, and that the department is veering from its predecessor's work to rein in fraudulent for-profit colleges.

    Hong Kong Leader Says No Compromise as Violence Escalates

    [NATL] Hong Kong Leader Says No Compromise as Protest Violence Escalates

    Hong Kong’s government is refusing to compromise after one pro-democracy protester was shot and another set on fire in a rare weekday protest. The five-month protest has seen a steady rise in violence, with both pro-democracy protesters and the Hong Kong government refusing to give ground.

    (Published Monday, Nov. 11, 2019)

    Education Department officials dispute that claim, saying they're working quickly to clear a backlog that was inherited from the previous administration.

    When Obama left office, 16,453 borrowers were waiting for loan cancellations that had already been approved, and more than 64,000 others had filed new applications. For months, advocates say, it appeared few or none of those cases were being processed. Democrats in the Senate requested an update from the Education Department in May but say they received no response.

    On Monday, the department released data to The Associated Press showing 7,085 of the 16,453 previously approved claims have been discharged, amounting to $92 million in loans. Another 7,300 are in the final stages of the process and are to be discharged shortly, while the remaining 2,000 are currently being processed by the department.

    Still, the wait has left some borrowers paying for loans that were promised to be wiped clean by now. Some have lost wages and tax returns to debt collectors.

    Ramos ran up $15,000 in debt to attend the American Career Institute, a chain of for-profit colleges that abruptly closed in 2013 after she received nine months of training as a medical assistant. Now enrolled at MassBay Community College and working toward a certificate in surgical technology, Ramos says she hasn't heard any update on her debt cancellation and worries she'll still have to pay it back.

    "Because of the education I got at MassBay, I'm going to be able to get good-paying job. But it's not fair that I'm going to have to use that money to pay back something that didn't deliver," she said.

    Ivanka Trump: Whistleblower Identity Not Relevant

    [NATL] Ivanka Trump: Whistleblower Identity Not Relevant

    Senior White House adviser Ivanka Trump told The Associated Press that the whistleblower's identity is "not particularly relevant." She also criticized former Vice President Joe Biden, saying that he made money after public service.

    (Published Friday, Nov. 8, 2019)

    The Obama administration cracked down aggressively on for-profit colleges that enticed students to take on hefty loans with promises they couldn't keep. It pressured chains including Corinthian Colleges and ITT Technical Institute to close , and it approved at least $655 million in loan cancellations from those chains.

    "They had greatly accelerated the rate of approval of these applications," said Pauline Abernathy, executive vice president of the Institute For College Access and Success, a nonprofit advocacy group based in Oakland, California. As of last week, Abernathy said, she hadn't seen evidence that "a single application has been approved under the new administration."

    In May, a group of Democratic lawmakers urged Education Secretary Betsy DeVos to speed up the process. Attorneys general from 17 states and Washington, D.C., later told DeVos the delay was harming borrowers. And a coalition of 31 advocacy groups for military veterans sent a letter to members of Congress this month saying many veterans are waiting for loan discharges, adding that "any delay is an affront to defrauded service members."

    After publicly saying little on the topic for weeks, DeVos said this month that nearly 16,000 cases are now being processed and that "some borrowers should expect to obtain discharges within the next several weeks." Her statement didn't provide an explanation for the delays.

    Sen. Elizabeth Warren of Massachusetts, a Democrat, said the slowdown can't be explained as a hiccup in the new Republican administration's transition to office.

    "This is the Trump administration stepping on a bunch of people who have already been stepped on many times before," Warren said in an interview. "Students who were cheated by predatory for-profit schools should not have to wait another day to get their loans canceled."

    Kent Testimony: Trump Actions "Injurious To The Rule Of Law"

    [NATL] Kent Testimony: Trump Actions "Injurious To The Rule Of Law"

    Transcript of key State Department official's testimony reveals more damaging evidence against President Trump.

    (Published Thursday, Nov. 7, 2019)

    For some borrowers, the wait has stretched more than a year.

    Sarah Dieffenbacher is waiting on an application she filed in March 2015 after taking out $50,000 in federal loans to attend a Corinthian Colleges campus in Ontario, California. She has since defaulted on her loans, and a collector is trying to garnish her wages. On June 9, a federal judge reviewing her case told the Education Department to make a decision within 90 days.

    On June 14, DeVos drew a new round of criticism from borrower advocates when she announced plans to rewrite Obama-era rules that were meant to streamline the complex path toward loan forgiveness. She described the rules, which were set to take effect in July, as "a muddled process that's unfair to students and schools."

    An Education Department spokeswoman said the 64,000 pending cases will be reviewed under current rules.