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With Proposed Rule Changes, Burden Shifted To Student Loan Borrowers

Secretary of Education Betsy Devos.
Gage Skidmore
Secretary of Education Betsy Devos.

U.S. Education Department Secretary Betsy DeVos is pushing rules that will make it harder for students defrauded by for-profit colleges to get their federal loans forgiven. About 5 percent of North Carolina students attend such institutions. Numerous for-profit schools have closed without much warning in recent years or are set to close, including the Regency Beauty Institute, Charlotte School of Law, ITT Technical and the Art Institute of Charlotte.

DeVos’s proposed rules would require students to prove that their schools knowingly made false promises in recruitment and advertising materials. Borrowers would also not be able to file class-action lawsuits against their schools and federal funds available for refunds would be cut by more than $10 billion over the next decade.

Supporters of the rule change like Mary Clare Amselem of the conservative Heritage Foundation, think DeVos is on the right track. She spoke to NPR.

"Shrinking the budget that goes towards borrower defense is definitely a good thing for American taxpayers," Amselem said. "Basically, any students could raise their hand and qualify for free money."

Kelly Tornow, who is the director of policy at the non-partisan, non-profit Center for Responsible Lending, located in Durham, does not think too many students are filing borrower defense claims.  She talked to WFAE’s Gwendolyn about the department of education's change in policy in this interview.