Student-loan borrowers who are defrauded by their colleges could soon find it easier to get their debt forgiven and to sue their colleges for wrongdoing, under a proposed rule that the Education Department is set to issue on Thursday.
The draft rule, which was prompted by the abrupt collapse of Corinthian Colleges, in 2014, and closure a year later, would allow groups of students — not just individuals — to have their federal loans discharged in cases of fraud, and would ban the use of mandatory-arbitration clauses that can force borrowers to settle claims against their colleges out of court.
