Education Department forgives $150 million in student debt on court order

Secretary of Education Betsy DeVos
(Image credit: Getty Images)

The Department of Education is forgiving about $150 million in student debt belonging to some 15,000 borrowers, around half of them former attendees of the for-profit Corinthian Colleges chain, which went bankrupt in 2015. The agency announced the loan cancellation Thursday in response to a federal court order and began notifying affected students by email Friday.

Education Secretary Betsy DeVos had sought to avoid implementing a set of Obama-era "borrower defense" regulations, among them an option of loan discharges for students whose schools have closed. But a federal judge ruled against her plan in September and also rejected a similar push by for-profit colleges in October.

The loan forgiveness process could take up to three months to complete, but affected borrowers do not have to take any action to benefit. Any payments made on the discharged loans will be applied to other debt on the student's account or returned to the payer, the Education Department announcement notes, and "information related to a discharged loan and its payment history [will be] removed from the borrower's credit report."

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Bonnie Kristian

Bonnie Kristian was a deputy editor and acting editor-in-chief of TheWeek.com. She is a columnist at Christianity Today and author of Untrustworthy: The Knowledge Crisis Breaking Our Brains, Polluting Our Politics, and Corrupting Christian Community (forthcoming 2022) and A Flexible Faith: Rethinking What It Means to Follow Jesus Today (2018). Her writing has also appeared at Time Magazine, CNN, USA Today, Newsweek, the Los Angeles Times, and The American Conservative, among other outlets.