Education Department Revives Website That It Said Made Applying for Loan Forgiveness Too Easy

THE TRUMP administration is set to revive a website that the Education Department’s Federal Student Aid office designed to help students who have been defrauded by their colleges apply for loan forgiveness – a decision made less than 24 hours after a whistleblower complaint surfaced, accusing a high-ranking department official of initially rejecting it on grounds that the tool made the process too easy.

Those familiar with the reversal say Diane Auer Jones, principal deputy undersecretary at the Education Department, gave the go-ahead Tuesday for staff at the Federal Student Aid office to continue developing the website after the whistleblower filed multiple complaints with the Office of Inspector General. The complaints reported that Jones scuttled the website because she was unhappy with the prompts the smart application would ask of borrowers, thought it provided them with too much information and would have helped too many complete the application correctly, without any disqualifying mistakes.

The Education Department denies the whistleblower’s accusation and told U.S. News that Jones rejected the new website because it included data that was not accurate, represented a significant bias and would have been unhelpful to borrowers seeking to apply for loan forgiveness.

Now, department officials say the website was never blocked at all.

“There has been no reversal on this at all,” says Angela Morabito, a spokeswoman for the department. “There can’t be a ‘reversal’ on a decision that was never made.”

Morabito tells U.S. News in response to questions about the site’s revival that it was Jones who insisted on creating a smart form to auto-populate borrower information and that the changes required a delay in the website’s development.

“It is totally counterintuitive to think that we would want to delay implementing our own reg and would rather keep the deeply flawed one used by the previous administration,” she says.

However, the narrative presented by the department doesn’t speak to the concerns raised by the whistleblower, who also said the changes Morabito described could have been made “almost instantly.”

The development of the website was part of a $90 million federal contract to build one main hub for all federal student aid needs that modernized existing loan servicing portals and made them more user-friendly. As part of the larger redesign, staff at the Federal Student Aid office, all of whom are career officers and not political appointees, were tasked with developing a website that would allow students to apply for what’s known as borrower defense – a process by which students whose colleges misled them about things like job placement rates, average earnings post-graduation and the transferability of credits to apply for some or all of their debt to be forgiven.

The borrower defense rule – revised in 2016 by the Obama administration to protect students from predatory for-profit colleges – recently underwent a contentious overhaul to reflect Education Secretary Betsy DeVos’ long-standing belief that the rule was too lax and should be revamped to limit relief to those who were most seriously harmed.

The new rule makes it more difficult for student loan borrowers to qualify for relief, and, for those who do qualify, the rule includes a new formula that provides only partial relief to the majority of claims. The new rule is viewed as extreme even by some congressional Republicans, who joined Democrats in the House and Senate earlier this year to pass a bipartisan resolution that would have nixed the rule’s revision entirely.

President Donald Trump vetoed the resolution last month. The Democratic-controlled House is set to vote Friday to overrule the president’s veto – an effort that would require two-thirds vote in both chambers.

The new borrower defense website, which is supposed to reflect the changes to the rule as well as streamline the application process so that claims could be processed more easily, was scheduled to go live July 1, when the new borrower defense rule is set to take effect. It’s unclear now when the new website will be available. For now, borrowers seeking to make a claim can still use the original application.