Monday, April 13, 2020


DeVos reaches settlement in lawsuit over loan relief program

The U.S. Education Department is promising to process student loan forgiveness claims for nearly 170,000 borrowers within 18 months as part of a proposed settlement announced Friday in a federal lawsuit.

The suit alleges that Education Secretary Betsy DeVos illegally stalled a program known as borrower defense to repayment, which promises to forgive federal student loans for borrowers who are cheated by their colleges. When the lawsuit was filed in June 2019, it had been a year since the department issued a final decision on any claim.

Most of the borrowers awaiting decisions attended for-profit colleges, and some have been waiting more than four years for a decision.

Under the settlement, DeVos admits no wrongdoing but promises to issue decisions on all pending claims within 18 months, and to cancel debt for approved claims within 21 months. In court documents, the department said it had paused the program while officials crafted new regulations. The agency says it already resumed processing claims last December.

In a statement released Friday, the Education Department called the proposed settlement “an important win for students and for taxpayers.”

“Rather than have their claims needlessly delayed by unnecessary litigation, students will now have their cases adjudicated promptly,” the agency said. “This proposed settlement is validation of that process and of the department’s longstanding goal to resolve all of these claims as quickly as possible.”

Theresa Sweet, the lead plaintiff in the case, called the deal an “enormous relief.” She applied for federal loan relief in 2016 after graduating from the Brooks Institute of Photography, a now-defunct for-profit college in California. Sweet said the school lied about its graduates’ employment rates and salaries, and left her with a degree that never led to a job in the area she studied.

“For years, people have been paralyzed with debt and forced to put their education, personal goals and financial plans on hold because we didn’t know if or when we might get a decision,” Sweet said in a statement. “Having the Department of Education be forced to put a time frame on making these decisions is vindicating.”

The borrower defense program dates to the 1990s but was expanded under former President Barack Obama to make it easier for students to get loans erased when colleges commit fraud. The update was directed at thousands of students who attended for-profit colleges that collapsed amid accusations that they lied about the success of their graduates.

But DeVos suspended the 2016 rules when she took office and last year issued new ones making it tougher for students to get loans cleared. At the time, DeVos said the previous rules were overly generous and allowed too many students to get loans erased at the expense of taxpayers.

Among other changes, the department has shifted to a formula that provides only partial loan relief for most students whose claims are approved. The formula, announced in December, offers scaled relief based on the financial harm students suffered as a result of their colleges’ fraud. Opponents have vowed to sue, saying federal law entitles deceived students to full relief.

Under the settlement, the department says it will waive all loan interest that has accrued while students await a decision on their claims. If the agency fails to decide a claim within 18 months, officials must cancel 30% of debt for every month they’re overdue. And if the agency garnishes students’ wages or takes their tax refunds while they’re awaiting a decision, it must discharge 80% of the debt.

“This settlement is a very important step that will allow them to finally get a decision and move forward,” said said Toby Merrill, director of the Project on Predatory Student Lending at Harvard University, which represented the plaintiffs. “The Department of Education’s refusal to cancel these loans quickly and in their entirety is a stain on the federal student loan program.”

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Some degrees Don’t Pay Off

A new tool released in January by the Texas Public Policy Foundation (TPPF) reveals which programs give students the most (and least) return on their investment. The tool uses data from the College Scorecard as well as the now-repealed Gainful Employment regulations to determine which programs “pay off.”

TPPF’s website includes this explanation of the rule:

"Gainful Employment (GE) were old regulations that tried to hold colleges accouxntable by establishing cutoffs for two debt-to-income rates…Programs would receive one of three gainful employment scores – ‘Pass’ for programs with low debt relative to earning, ‘Fail’ for programs with high debt relative to earnings, and ‘Zone’ which was basically a probationary rating."

According to TPPF’s new tool, earnings and debt data were available for 28,812 UNC system students who graduated between 2014 and 2016. Of those, 57 percent graduated from programs that would pass TPPF’s “Gainful Employment Equivalent.” About 33 percent graduated from programs that would be on probation (Zone), and 2,891 (10 percent) graduated from programs that would fail. Earnings or debt data were unavailable for 459 UNC system programs.

The website projects, “If these percentages are representative of all graduates, then of the 72,437 total graduates, 41,292 graduated from programs that would pass Gainful Employment Equivalent, 23,877 graduated from programs that would be on probation (Zone), and 7,268 graduated from programs that would fail.”

The tool, “College Earnings and Debt by Major: Which college degrees are worth it?” is available here.

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One of Australia's top universities will allow students to use Year 11 results to apply after coronavirus caused disruption to the school calendar

One of Australia's top universities will allow students to use their Year 11 results to apply for courses.

Students can apply to undergraduate programs at Canberra's Australian National University (ANU) for 2021 with their Year 11 scores, due to the school year being disrupted by COVID-19.

The university believes taking earlier results will lighten stress levels for Year 12 students after a tumultuous year of study.

ANU begin making offers in August, with Vice-Chancellor Professor Brian Schmidt advising prospective students to apply in the upcoming school holidays.

'All Year 12 students who want to study at ANU can focus on completing their studies and preparing for university, knowing that if their marks from Year 11 meet our entry requirements they can join one of the world's leading universities,' he said in a media release.

The Year 11 results offer follows on from further successful alterations to ANU's application procedure, where students are assessed on extra-curricular activities beyond their scholastic achievements to gain entry into the university.

Students who apply with Year 11 results must go on to complete Year 12 for their scores to be valid, with accommodation and scholarships available for successful applicants.

Professor Schmidt said the new application procedures are based on research to ensure the best students are given the chance to go to ANU.

'This change was to help our students,' he said. 'Rather than have them choose their university only a few weeks before term starts, we now assess students on their academic results through Year 11, as well as their extra-curricular achievements and personal circumstances.

'The success of this new approach over the past year means we are well placed to offer thousands of talented school-leavers across Australia the chance to study with us here in Canberra.

'This is particularly important as they are dealing with the stress of finishing their studies during a global pandemic.'

Australian Year 12 students have been told they will be able to graduate this year despite the disruption to their studies caused by the coronavirus outbreak.

Federal education minister Dan Tehan on Tuesday confirmed the states and Commonwealth agreed students will still proceed to finish high school this year.

'For all those students out there, for all those parents out there, there will be no year 13, there will be no mass repeating. You will get your leaving certificate this year,' he said.

The announcement followed a phone meeting between state and federal education ministers this week to discuss the impact the COVID-19 pandemic upon studies.

Mr Tehan also said the government did not want those students studying from home for part of the year to be left behind when assessments roll around, and grades may be adjusted to account for the disruption.

'When it comes to how the ATAR is calculated and assessed, the Commonwealth is going to do further work with the university sector, with the vocational education sector and will come back to the Education Council in May,' he said.

'What we all are going to do is to endeavour to make sure that this year's ATAR scores are the same as last year's ATAR scores... But we will take into account those students who have to learn from home, those who might not be able to access the technology like others do.'

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