Aid Office "Focused" on Dealing With Borrower Claims

October 5, 2017

Federal Student Aid Chief Operating Officer A. Wayne Johnson said Wednesday that the Department of Education is "marshaling the resources" to deal with a backlog of thousands of borrower-defense claims submitted by former students of Corinthian Colleges and other for-profit institutions.

Johnson made the comments in a Q&A session after speaking at an event organized by the National College Action Network on boosting completion of federal financial aid applications.

Borrower defense to repayment allows students who were the victims of fraud or misrepresentation by their college or university to apply to have their student loan debt discharged. More than 65,000 claims are still pending review at the department, according to an update an administration official gave Democratic lawmakers in July.

"There is a mixture of claims that are absolutely warranted and there is a mixture of claims -- let’s just say some folks showed up and decided that there was an opportunity to make a claim whether they were actually warranted or not," Johnson said Wednesday. "Our challenge is to go through the whole claim file."

Johnson said the department must examine an individual claimant's situation while at the same time making sure any finding of relief reconciles with federal mandates.

"We’re focused on getting it dealt with and drilling into it as aggressively and as assertively as possible," he said. "I will say that I'm not somebody that sits by and watches things happen."

Johnson's boss, Education Secretary Betsy DeVos, generated controversy last month when she observed in a speech to Republicans in Michigan that under Obama administration borrower-defense rules, "all one had to do was raise his or her hands to be entitled to so-called free money."

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