Release date: 12/14/2018
Reacts to U.S. Department of Education’s Cancelling Closed School Loans
(RALEIGH) Attorney General Josh Stein released the following statement in response to the news that the U.S. Department of Education (DOE) will automatically cancel approximately $150 million in federal student loans for thousands of borrowers who attended a recently-closed school: “I’m pleased that the Department of Education and Secretary DeVos will begin complying with the borrower defense rule and start granting automatic closed school discharges for 15,000 student borrowers. I sued the Department of Education to implement the borrower defense rule because students who are victims of fraud deserve student loan relief. Now that some of their loans will be forgiven, these students can have a real chance at a fresh educational start and a successful future unburdened by past debt. I call on the Secretary to ensure that all entitled student borrowers get their relief as soon as possible.”
In July 2017, Attorney General Stein and 18 other attorneys general sued the DOE to reinstate the borrower defense rule after the Trump administration refused to implement it. The borrower defense rule helps defrauded student borrowers get automatic financial relief for student loans and grants if they did not re-enroll within three years. In October 2018, a federal court sided with North Carolina and the other states, ruling that the DOE must reinstate the rule. Also in October, Attorney General Stein and 20 other attorneys general called on the DOE to discharge these closed school loans without delay. In response, the DOE has granted the relief Attorney General Stein requested.
In recent years, thousands of students have been displaced by colleges that close, leaving the students with thousands of dollars in student loans. Many of these students will have thousands of dollars of student debt wiped out as a result of this $150 million decision. More than $80 million of this loan relief will go to thousands of students, many in North Carolina, who were defrauded by Corinthian Colleges, which closed in 2015.
Contact:
Laura Brewer (919) 716-6484
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