The US Department of Education has announced that it is cancelling $55.6 million in student debt as it approves more than 1,800 loan forgiveness claims from students who were victims of for-profit college fraud.
The announcement is part of the Biden administration’s pledge to cancel $1 billion in student debt from defrauded borrowers. Over 73,000 students were eligible for the debt relief under the Trump administration but only received partial loan forgiveness after former Education Secretary Betsy DeVos modified the cancellation calculation, Maya Yang writes.
The ‘Borrower Defense” rule under which the relief is provided directs the secretary of education to cancel student debt in instances of college misconduct. DeVos had previously called the rule a “bad policy” that relied heavily on taxpayers for debt relief and lacked sufficient safeguards to prevent false claims.
As a result of DeVos’s modifications, the rule was suspended and from 2018 to 2019, zero claims were processed. The new Department of Education in turn inherited a backlog of over 100,000 forgiveness claims.
“Today’s announcement continues the US Department of Education’s commitment to standing up for students whose colleges took advantage of them,” secretary of education Miguel Cardona said. “The Department will continue doing its part to review and approve borrower defense claims quickly and fairly,” he added.
The colleges mentioned in Friday’s announcement are Westwood College, Marinello Schools of Beauty and the Court Reporting Institute.
Westwood College made widespread misrepresentations to students that its criminal justice program would lead to successful careers as police officers in the Chicago area. It told students that they would be able to find employment with the Chicago Police Department and other law enforcement agencies when these agencies in fact would not accept Westwood credits. Many borrowers had to ultimately take on minimum wage jobs that did not require degrees.
Similarly, the Marinello Schools of Beauty made false claims from 2009 to 2016 about the types of instruction offered at its campuses. Students accused the schools of failing to train them about key elements of a cosmetology program, as well as leaving them without instructors for weeks or months at a time.
Lastly, from 1998 to 2006, the Court Reporting Institute misled students about the duration needed to complete its court reporting program. As a result, the majority of students were unable to complete the program and become court reporters.
In addition to the debt cancellation, the Department of Education is also easing the forgiveness process for students with “total and permanent” disabilities and is considering a future rule-making on borrower defense.
