State Attorneys General Seek Input on Loan Discharges

August 19, 2015

Eleven state attorneys general on Tuesday urged the U.S. Department of Education to seek their input as it develops a process for discharging federal loans for students who attended colleges that defrauded them.

In a letter to Education Secretary Arne Duncan, the coalition of state attorneys general, led by Maura Healey of Massachusetts, a Democrat, recommend that the department allow states to participate in the loan discharge cases and submit evidence of fraud they’ve gathered against a college.

They also urge the department to come up with a process to grant group loan discharges and to expand the discharges beyond just federal direct loans to PLUS loans and federally guaranteed loans.

The Education Department said Tuesday that it would begin accepting online loan discharge applications of former Heald College students who attended certain programs after 2010. The department has said it will automatically grant those discharges based on evidence it already had about Heald misrepresenting job placement rates.

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