In a move to give college students more power over their debt, the Obama Administration has made it so students can apply to have their federal loans discharged if they are able to prove a school used illegal or deceptive tactics in violation of state law to persuade them to borrow money for college. Under the “borrower defense to repayment” process the “government would also consider wiping away debt in the event of a “substantial misrepresentation” by the school about the nature of the program, financial charges or the chance graduates have of finding work, according to the proposal,” reported The Washington Post. While the legislation was passed in the 1990s, the Obama Administration revised the rules to give students the power to sue a college for back tuition and fees if they felt “substantially misrepresented” by the institution.
In fact, according to the government’s student aid website, students may be able to have their entire outstanding federal Direct Loan forgiven and be reimbursed for amounts you have already paid.
Sounds like it was a move in the right direction, considering student loan debt is estimated at about $1.3 trillion, spread out among about 43 million borrowers. But some say this provision could harm Historically Black Colleges and Universities (HBCUs) which might become the target of frivolous lawsuits. “Surveys show that African-American students who graduate from HBCUs often feel more nurtured and supported than Black students who attend predominantly white institutions. However, socioeconomically, there is more overlap between most HBCU student populations and for-profit and community college student populations than large PWIs or state institutions: precisely the kinds of students this legislation purports to help,” The Root’s Jason Johnson wrote.
That’s why HBCUs are pushing back at this new revision of the legislation, arguing the wording is too broad.
“[W]hat about a regular college that says, “Going to [fill in the blank] private college will change your life”? Did it fail if you didn’t become all you could be between trips to the cafeteria and the quad? Should you be able to blame the career-services office if it can’t get you any decent paid internships? This is why dozens of HBCUs have rallied against this legislation. The stipulations for being able to sue your college for “failing to meet” expectations are just too broad and too vague and open the door to all sorts of punitive shenanigans that many small HBCUs can’t afford to battle,” Johnson explained.
Some observers claim the Obama Administration has already failed HBCUs and this new revision could officially ruin them.