Students will have a clearer path to loan forgiveness if they are defrauded or misled by their colleges, according to rules issued Monday by the Obama administration, which also create a financial backstop to ensure that schools, not taxpayers, are responsible for the debt.
“The Obama administration won’t sit idly by while dodgy schools leave students with piles of debt and taxpayers holding the bag,” Education Secretary John B. King Jr. said on a call with reporters Monday. “Students who are defrauded deserve an efficient, transparent and fair process to get the loan relief to which they are legally entitled. And schools that harm their students should be on the hook for the damage.”