The inspector general is probing the Trump administration’s plan for how it will process more than 210,000 loan-forgiveness claims from borrowers defrauded by for-profit colleges.
THE EDUCATION Department’s Office of Inspector General is investigating the new formula established by Education Secretary Betsy DeVos that’s used to decide how much federal student loan debt relief that borrowers who have been defrauded by colleges can receive.
According to sources familiar with the inspector general’s ongoing audits and reviews as well as a document viewed by U.S. News, the investigation is in the initial stages, and findings are set to be published in spring 2021.
Last year, the Trump administration announced a new plan for how it will process a backlog of more than 210,000 claims for student loan forgiveness from borrowers defrauded by for-profit colleges – a strategy employing a formula that will provide only partial relief to the majority of them.
The new methodology, which represents a major shift from the more inclusive criteria for relief established by the Obama administration, uses various publicly available earnings data to compare median earnings of graduates who have made borrower defense claims to the median earnings of graduates from comparable programs.