Washington, DC — Forget celebrating your graduation from college. In Ohio, where people owe more than 53 million in student loans, you could be cheering for debt relief.
On Tuesday a federal judge ordered the U.S. Department of Education to immediately implement an Obama-era student loan forgiveness rule. The new “borrower defense” rule will wipe out the federal loans for students whose schools lied about their education.
"Like there was a job market for the skills that they were about to learn, when there really wasn't a job market for those skills or whether that student had the capacity to learn the information that the school was going to provide to them, then that student could petition the U.S. Department of Education to have those loans forgiven,” Attorney Marc Dann said.
The rule is expected to have a big impact on Ohio as the seventh greatest borrower in the country for student loans in 2016. The primary target is for-profit schools, a number of which have been sanctioned by the government for deceptive sales tactics, or offering degrees they weren't accredited for.
Brian Cooper attended one of those for-profit schools.
"I was trying to better myself and now I've destroyed my life even more," Cooper said.
Cooper, graduated from one of the country's largest for-profit colleges. Now, he's laying floors instead of working in electronics,the reason he enrolled. Cooper also ended up fifty grand in debt.
"Pretty much I work to pay my loans and that's about it," Cooper said.
The new student loan rule will also wipe out debts if a student was pushed into an unaffordable loan, which critics say is part of the whole for-profit model.
"It's like when you go to the car dealer and the car dealer is also representing the bank in arranging for financing of the car he’s trying to sell you,” Dann said. Every incentive is on the part of the person making the representation is to sell and to get the student to sign on the bottom line and so they can get the money.”
The program was supposed to start in July, but the Department of Education delayed it because they felt it made it too easy to discharge student loan debt and would unfairly burden taxpayers who ultimately foot the bill on federal loans. But then Attorneys general from 19 states plus the District of Columbia, sued and won.
The question now is, will the government pay up? There's currently a program where, if you work in public service for 10 years, and make valid loan payments for 10 years, the government will forgive the leftover balance. But we learned 99% of the people who applied, were denied. However, if you want to apply, you can do so by clicking here.