“These unconscionable contracts effectively trap these workers in debt bondage, making it impossible for them to leave their jobs,” said Martina Vandenberg, president of the Human Trafficking Legal Center, in congressional testimony last month about what she sees as a wider problem. As a result, the workers said they felt trapped between continuing in untenable jobs or risking financial ruin. He supported forgiving up to $10,000 of student debt for each borrower during his presidential campaign, though he has also said widespread loan forgiveness would need to come from Congress.But when the workers tried to leave their jobs before the expiration of multi-year contracts, they were faced with paying tens of thousands of dollars in penalties to their employers, forced into arbitration or sued, in some cases for more than $100,000, according to a review of employment contracts, lawsuits and other documentation obtained by NBC News. It also comes as President Joe Biden is considering wider student loan forgiveness. Payments for federal student loans remain frozen during the coronavirus pandemic, though the freeze is set to lift at the end of August. The discharge amounted to $5.8 billion in relief for more than half a million borrowers. The move comes after officials announced this month that people who borrowed money to attend a school owned by Corinthian Colleges will have federal student loan debt canceled. 'Extraordinary investment': Dartmouth College eliminating loans from its financial aid packagesĮducation Secretary Miguel Cardona said in a statement Wednesday: “We are pleased to have worked with plaintiffs to reach an agreement that will deliver billions of dollars of automatic relief to approximately 200,000 borrowers and that we believe will resolve plaintiffs’ claims in a manner that is fair and equitable for all parties.” The department said in the proposed settlement it determined that attendance at the schools “justifies presumptive relief, for purposes of this settlement, based on strong indicia regarding substantial misconduct by listed schools, whether credibly alleged or in some instances proven, and the high rate of class members with applications related to the listed schools.”Įducation: Billions in student loans erased for students preyed upon by Corinthian Colleges most relief yet by White House The schools include the University of Phoenix, DeVry University and others. The agreement would help people who attended dozens of different schools, which are mostly for-profit colleges and other vocational programs. The deal would reverse 128,000 “denial notices” sent to people during the Trump administration who were applying for relief, according to multiple reports. In addition to canceling debt, the agreement would refund borrowers for money they paid to the Department of Education and offer credit repair options.ĥ0 years after Title IX: Most top colleges deprive female athletes of equal opportunitiesįor subscribers: The Supreme Court just made a monumental ruling on gun rights. The proposed settlement will need to be approved by a judge, and a hearing has been scheduled for next month. The settlement addresses a class-action lawsuit filed in 2019 that has accused the Trump administration and Biden administration of delaying solutions for borrowers who filed for relief. The Department of Education said it would wipe the debt for the borrowers in a proposed settlement filed in federal court Wednesday. The Biden administration this week agreed to cancel about $6 billion in federal student debt for about 200,000 people who attended schools that they say defrauded them. Watch Video: White House end $5.8 billion in Corinthian Colleges student debt
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