https://news.yahoo.com/judge-slams-devos-rejecting-94-181522331.html
COLLIN BINKLEY
,Associated Press•October 21, 2020
Months after vowing to process a backlog of 160,000 requests for loan forgiveness from students who say they were defrauded by their schools, the U.S. Education Department has rejected 94% of claims it has reviewed, according to a federal judge who is demanding justification for the “blistering pace” of denials.
In a biting decision issued Monday in California, U.S. District Judge William Alsup said the department has been denying claims using template letters that are “alarmingly curt." Alsup threatened to suspend the agency from rejecting further requests, saying its approach “hangs borrowers out to dry.”
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The dispute stems from a 2019 lawsuit brought by 160,000 borrowers who say the Education Department illegally stalled their claims for loan relief. The claims were filed through a program known as borrower defense, which forgives federal student loans for borrowers who are cheated by their colleges. It's most often used by students who attended for-profit colleges.
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“We need to know what is really going on," wrote Alsup, who was appointed to the court by President Bill Clinton. He said DeVos will not be required to appear for deposition “at this time,” but he suggested it may be necessary later.
DeVos set out to overhaul the loan forgiveness program in 2017 and last year released new rules making it more difficult for borrowers to get loans erased. In the meantime, claims were piling up. When the lawsuit was filed, it had been a year since the department issued a final decision on any claim.
The program had been expanded by President Barack Obama to erase loans for students who attended the Corinthian Colleges chain and other for-profit colleges found to have lied about the success of their graduates. DeVos opposed the expansion, saying it made it too easy for students to get their loans erased at the expense of taxpayers.
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Rejections were delivered through standardized letters that included information on how to appeal the decision, but Alsup said the letters fail to explain the decision. It leaves borrowers in a “disturbingly Kafkaesque" situation, he wrote.
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