Dept. of Education to cancel $150 million in student loan debt

"It’s disappointing that it took a court order to get Secretary DeVos to begin providing debt relief to students," said U.S. Sen. Patty Murray.

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By Dennis Romero

The U.S. Department of Education announced Thursday it would automatically cancel $150 million in student loans connected to for-profit colleges that closed in recent years.

The move was made under an Obama-era policy that a federal judge in October essentially forced U.S. Secretary of Education Betsy DeVos to implement. The story was first reported by Politico.

The discharge of loans applies automatically to about 15,000 students who attended now-defunct colleges that closed between Nov. 1, 2013, and Dec. 4, 2018, according to the department's announcement.

About half of those affected attended Corinthian Colleges, Inc., a chain that closed on April 27, 2015, the department stated. Other students who attended recently closed campuses or who believe they were otherwise defrauded can still apply to have their loans canceled, the department said.

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The office of Sen. Patty Murray, D-Wash. the ranking member of the Health, Labor, Education and Pensions Committee, said DeVos was "still trying to rewrite the underlying rule" that sparked the loan cancellations.

In April, DeVos canceled memos published by the Department of Education under President Barack Obama that imposed tougher rules on how the federal government oversees student loan debt connected to for-profit colleges. California and other states sued.

Murray's office said more than 100,000 students have outstanding claims against the institutions in question.

“It’s disappointing that it took a court order to get Secretary DeVos to begin providing debt relief to students left in the lurch by predatory for-profit colleges," Murray said, "but I am pleased the department has finally started implementing this rule and that some of the borrowers who attended schools like Corinthian Colleges and ITT Tech are finally getting their loans canceled. This is a good first step, but it’s not good enough."

Dennis Romero

Dennis Romero writes for NBC News and is based in Los Angeles.