Department of Education approves $415 million loan forgiveness to defrauded students
February 16 (UPI) — The Biden administration on Wednesday provided $415 million in student loan forgiveness to nearly 16,000 borrowers misled by for-profit colleges.
Among the borrowers to receive loan forgiveness on Wednesday were 1,800 former DeVry University students, as the Department of Education said in a statement that it found the institution had made substantial and widespread misrepresentation of his placement rates”.
The Department of Education said the claims were the first under a law known as borrower’s defence, which promises loan forgiveness to borrowers who have been defrauded by an institution that is currently operating.
“The Department will seek to recover the cost of DeVry’s rejections,” it said in a statement. “The Department anticipates that the number of approved claims related to DeVry will increase as it continues to review pending claims.”
According to the department’s findings, DeVry claimed from 2008 to 2015 that 90% of its graduates who were actively seeking employment obtained employment in their field of study within six months of graduation, while in in reality, his placement rate was around 58%.
“The department found that more than half of the jobs included in the claimed 90% placement rate were filled by students who had obtained them long before graduating from DeVry and often before even enrolling,” the department said.
In 2016, DeVry agreed to pay $100 million to settle federal charges that said he recruited prospective college students with misleading advertisements citing false career success rates and income levels for graduate students.
In addition to the DeVry cases, the Education Department provided $53.1 million in Borrower Defense Payments to 1,600 borrowers who attended Westwood College, $3.1 million to approximately 130 students in the ITT Technical Institute nursing and $3 million to 270 borrowers who attended Minnesota School of Business/Globe University after it was discovered that the three now-defunct institutions also misled borrowers.
Additional waivers of $284.5 million were also issued to more than 11,900 students who attended institutions such as Corinthian Colleges, about which the Department of Education had previously released findings.
To date, the Department of Education has issued $2 billion in borrower defense reimbursement to more than 107,000 borrowers, it said on Wednesday.
“The Department remains committed to granting discharges to borrowers when evidence shows their college has violated the law and standards,” said U.S. Secretary of Education Miguel Cardona.
“Students rely on the sincerity of their colleges. Unfortunately, today’s results show too many cases in which students were misled by loans from institutions or programs that could not keep their promises,” Cardona said.