The Obama Administration Is Still Bungling a Student Loan Scandal

The Obama Administration Is Still Bungling a Student Loan Scandal

iStockphot/The Fiscal Times

A few weeks ago I noted how the Education Department continues to force students from Corinthian Colleges to prove they were defrauded to obtain student loan relief, despite a litany of existing evidence. This week, the department itself released findings showing that 85,000 Corinthian students on its Everest and Wyotech campuses in California were indeed duped into enrolling based on intentionally false job placement statistics.

However, even after this, the Education Department did not automatically cancel federal loans for California Everest and Wyotech students, which it has the authority to do. It forwarded the information to Joseph Smith, the special master overseeing the overly bureaucratic debt relief process for Corinthian students.

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This is a joke. When students are demonstrably defrauded by their colleges, they should not have to pay back their loans. The standard loan contract stipulates that. Instead, the Education Department delays and delays, so it doesn’t have to give students back billions of dollars in what I guess officials see as profits. In fact, they’re still garnishing wages and tax returns to recoup these fraudulent debts.

Concerns of budgetary bean-counters have overtaken concerns about student well-being at the Education Department, and they should be ashamed of that.