5. House GOP bill could eliminate student loan forgiveness for half a million public servants
On Dec. 1, House Republicans released a 542-page higher education bill that could reshape how Americans pay for college.
The PROSPER Act includes a major overhaul of the $1.3 trillion federal student loan program. It changes how much parents and students are able to borrow, and would entirely eliminate certain loan-forgiveness programs.
Currently, over half a million public servants (public school teachers, police officers and social workers, etc.) who make regular payments on certain federal student loans can have their remaining debt forgiven after 10 years through the Public Service Loan Forgiveness (PSLF) Program.
Ending this program would drastically impact public servants who have made significant financial and career decisions based on PSLF provisions.
6. DeVos cuts relief for defrauded student
In 2016, the Department of Education found that for-profit giant Corinthian Colleges was guilty of defrauding students. Corinthian, which ran Everest Institute, Wyotech and Heald College has since shut down, but tens of thousands of its former students still struggle with student debt from the fraudulent college.
The Obama administration's policy was to forgive these loans, but on Wednesday, Betsy DeVos announced that the Department of Education would not be providing total forgiveness for many borrowers after all.
Going forward, the Department of Education will provide forgiveness based on how borrowers' earnings compare to the earnings of graduates from similar vocational programs. If they earn less than 50 percent of what their counterparts make, the Department of Education will forgive 100 percent of their loans. If a borrower's earning are comparable, they will receive less assistance.
"No fraud is acceptable, and students deserve relief if the school they attended acted dishonestly," said DeVos in a statement. "This improved process will allow claims to be adjudicated quickly and harmed students to be treated fairly. It also protects taxpayers from being forced to shoulder massive costs that may be unjustified."
"The department cannot suddenly change the rules to provide less relief," said Abby Shafroth, a staff attorney at the National Consumer Law Center to the Washington Post. "Changing course now is unfair to defrauded borrowers who were misled first by Corinthian and now by the department, and is likely to be challenged in court."
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