Education Department said Thursday it will cancel $150 million in federal student loan debt, despite Secretary Betsy DeVos' efforts to kill off the Obama-era policy.
DeVos proposed restricting "borrower defense" claims filed by former students whose schools closed or made false promises, but has to carry out regulations after court rulings sided with students.
Three months ago, a federal judge ruled that DeVos' attempts to kill the 2016 regulations were illegal, Politico reported. The judge also rejected for-profit colleges' bid to stop the policy in October.
The department said Thursday it will forgive loans for about 15,000 borrowers whose schools closed, preventing them from finishing their programs. About half of those borrowers attended Corinthian Colleges, a for-profit educational chain that closed its campuses in 2015.
They will account for $80 million of the automatically discharged loans, while borrowers whose schools closed between Nov. 1, 2013, and Dec. 4, 2018, will account for the other 70 million.
On Friday, impacted borrowers will begin to receive email notices from the Education Department. Loan discharges may take longer to process, and holders of the loans will inform borrowers what specific loans were forgiven.
Secy. DeVos had argued that debt forgiveness was too lenient and lacked adequate borrower proof requirements. But the department said proposed changes would reduce trivial claims and allow colleges to respond to allegations by borrowers.