The Department of Education just agreed to forgive $23 billion in student loans because—and this is the technical legal term—it got caught running a scam. 450,000 borrowers enrolled in schools so fraudulent the government had to admit in court that yes, those were in fact diploma mills we sent your loan money to. Our bad.
The settlement stems from a class-action suit claiming the DOE knew these schools were garbage and kept processing loans anyway. Borrowers attended institutions that promised careers and delivered nothing but debt and a certificate printed on cardstock from Staples. The government's defense strategy was to eventually just agree.
Here's who qualifies: people who attended schools the DOE already identified as predatory. The government maintains a list. They knew which schools were fraud operations. They funded them anyway. Your tax dollars went to institutions with names like "American Career Institute of Career Careers" that operated out of a strip mall between a vape shop and a place that cashes checks.
The borrowers had to apply for relief under something called borrower defense to repayment, which is bureaucrat-speak for "we gave loan money to a criminal enterprise and you got f*cked." Processing these claims took years. Some applicants died waiting. The government's customer service model was to simply outlive the customer.
This is the same Department of Education that sends you fourteen emails if you're late on a payment but somehow couldn't figure out that "Trump University School of Nursing" wasn't accredited. They automated the collections process but not the fraud detection process. Priorities.
The best part: this $23 billion settlement doesn't cost the DOE anything. It's federal loan forgiveness. The department just agrees to stop pretending you owe money for a degree that never existed. They're waiving a debt they created by funding a scam they acknowledged. It's like your arsonist offering you a settlement where he agrees to stop charging you rent on the house he burned down.
Photo by Towfiqu barbhuiya on Unsplash
Leave a Comment