Continue Reading Below
The program was built around an Obama-era rule – the Borrower Defense to Repayment – which is being re-evaluated by DeVos. The rule was designed to help students who attended for-profit schools but were misled about job placement prospects and opportunities to cancel their debt.
According to the lawsuit, more than 160,000 former for-profit college students have applied with the program and are awaiting a decision – however, the department has yet to grant or deny a single application. Those applications date back to June 2018, and plaintiffs allege the Department of Education has no timetable for action – adopting, instead, a policy of “inaction and obfuscation.”
A spokesperson for the Department of Education wrote in a statement to FOX Business that it stands "ready to finalize borrower defense claims when the courts allow us to proceed."
"The Department was resolving claims before the injunction and continues to adjudicate claims as quickly as it can. Sadly, for the affected students, we can’t take final action because of the pending litigation," the spokesperson added.
The current administration has stopped processing claims as it reevaluates the rule. DeVos has proposed an alternative that would offer partial forgiveness to qualifying borrowers.
The department was issued a court order to restart the program in October, but it has allegedly yet to do so.
The plaintiffs contend this inaction has damaged some students’ credit and limited access to federal student aid while causing emotional distress, “and a loss of wealth and opportunity” that will never be recovered.
The lawsuit comes as some progressive 2020 candidates are unveiling plans to forgive student debt for millions of Americans. Independent Vermont Sen. Bernie Sanders on Monday released his version of a proposal, which could wipe out as much as $1.6 trillion worth of debt. Massachusetts Sen. Elizabeth Warren recently detailed her plan to “cancel” student debt for about 42 million people.
Meanwhile, Texas Republican Rep. Dan Crenshaw took to Twitter on Tuesday to call the "#cancelstudentdebt" movement “immoral,” because it favors a “minority” of advantaged Americans at the expense of hardworking taxpayers who either don’t have a degree or who have already paid off their obligations.