The chief investigator for the Department of Education has issued a report, urging the department’s Office of Federal Student Aid (FSA) to move forward on tens of thousands of debt forgiveness applications that have been sitting around for more than a year.
Between the period of July 1, 2016 and January 20, 2017, under the Obama administration, the FSA approved 27,986 out of 46,274 debt forgiveness applications. Since January 20, 2017 — when Betsy DeVos became the Secretary of Education — the FSA has approved none of the 25,991 applications that have been submitted.
According to a published report, about 12,000 of those applications have been flagged for approval and 7,200 have been flagged for denial, but no action has been taken by the office.
The forgiveness applications are being filed by individuals who were illegally duped by colleges, many of them for-profit institutions, into borrowing money. There has been a huge influx of applications in recent years, stemming from scandals at entities such as Corinthian College and ITT Technical Institute.
In response to the report, the person in charge of the FSA, Wayne Johnson, said discharging some of the claims that have been flagged for approval is “imminent,” but did not provide a more objective timeline. Johnson claims the transition from the administration of former president Barack Obama to current president Donald Trump is why there has been a lag in claim approvals.
“The report fails to recognize that the change in administrations necessarily required time for the secretary and acting under secretary and their staffs to familiarize themselves with the history of the borrower defense claim review process in order to determine and advise [the office of Federal Student Aid] as to any policy changes that would be made,” Johnson said.
