There are millions of onetime college students in America who owe huge sums of money for student loans that bought them an education that turned out to have little market value. Now, there may be a ray of hope for their financial future.
In the past six months, more than 7,500 borrowers owing $164 million have applied to have their student debt expunged under an obscure federal law that had been applied only in three instances before last year. The law forgives debt for borrowers who prove their schools used illegal tactics to recruit them, such as by lying about their graduates’ earnings.
To be clear, we are not talking here about the stereotypical “Oberlin art history major who found out their lavish degree was worthless” that is used to brush this topic away so frequently. According to the WSJ, “So far, almost all of the borrowers applying for forgiveness under the 1994 program attended for-profit schools,” those actually fraudulent institutions whose business model is to prey on the needy and ignorant and soak them in exchange for degrees with little real world value. And, the story makes clear, the government is viewing their claims as potentially valid.
It is nice to imagine this debt forgiveness standard spreading to all types of universities. It would revolutionize how higher education is designed and marketed in America. But even if it only has the effect of denting the for-profit scam diploma industry, it’s worthwhile.
If you went to a for-profit school and owe a ton of student debt, start Googling.
[Photo via FB]