The Department of Education has the authority to discharge the federal student loan debt of students who are the victims of fraud—and they are doing so or at least planning on doing so in the case of students who attended the now-bankrupt Corinthian Colleges. However, in the case involving the Education Management Corporation (EDMC), the Justice Department reached a settlement with the for-profit college company, without EDMC having to admit to doing any wrongdoing. As a result, it is going to be much harder for students to have the proof they need to get their loans discharged than if the case had gone to trial and the Justice Department had prevailed.
Over the last decade, there have been dozens of such settlements with for-profit college companies – in which...
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