It's About to Get Harder to Seek Student Debt Relief
A new rule costs defrauded borrowers some longstanding rights.
Students pull a "ball & chain" representing the $1.4 trillion outstanding student debt at Washington University in St. Louis on Oct. 9.
Photographer: Paul J. Richard/AFP via Getty ImagesThis article is for subscribers only.
A new rule finalized Friday by the Obama administration will cost student debtors who say their colleges defrauded them some longstanding rights to get their federal loans canceled, while colleges on shaky financial footing dodged a government crackdown.
Those regulations, proposed in June, mark the administration's response to the spate of closures of for-profit colleges, following state and federal investigations and lawsuits that have so far led more than 80,000 Americans to seek debt relief, alleging fraud, according to new figures the U.S. Department of Education also released Friday.