The U.S. Department of Education has agreed to process student loan forgiveness applications for nearly 170,000 borrowers who claimed they were defrauded by for-profit colleges, as part of a settlement in a long-standing federal lawsuit.
If approved by the U.S. District Court in California, the settlement would end a case file June 2019, when consumer groups complained about the Education Department’s unwillingness to implement the Obama-era “borrower defense” rule, which allows students defrauded by for-profit colleges to have their loan debt wiped out. Instead, the Department came up with a new plan that would provide partial relief to most of the borrowers, based on their present-day income.
