Biden Education Department to Cancel $415M in Student Loan Debt

    The Biden administration will cancel $415 million in student debt for nearly 16,000 borrowers who claim they were misled by for-profit colleges.

    The loans for almost 16,000 former students will be canceled under a legal provision, called the “borrower defense to repayment,” which allows students to have their debts erased if they prove a for-profit school defrauded them, the Department of Education said Wednesday in a press release.

    The Education Department said it found that DeVry University, Westwood College, a nursing program at ITT Technical Institute, and Minnesota School of Business/Globe University provided false information regarding graduates’ job placement.

    “The department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” Education Secretary Miguel Cardona said in the release. “Students count on their colleges to be truthful. Unfortunately, today’s findings show too many instances in which students were misled into loans at institutions or programs that could not deliver what they’d promised.”

    Roughly 1,800 former DeVry students will receive nearly $72 million in full “borrower defense” discharges, and that figure is expected to grow as more claims are reviewed, the Education Department said.

    An additional $343.7 million will be provided to nearly 14,000 former students, including those who attended Westwood College, the nursing program at ITT Technical Institute, and the criminal justice program at Minnesota School of Business/Globe University.

    Another $284.5 million in discharges will be allocated to 11,900 former students who attended schools such as Corinthian Colleges and Marinello Schools of Beauty who previously qualified for relief but had not yet applied, the Education Department said.

    As of Thursday, the total amount of approved relief under the borrower defense reached roughly $2 billion for over 107,000 borrowers, according to the department’s press release.

    “When colleges and career schools put their own interests ahead of students, we will not look the other way,” Student Aid Chief Operating Officer Richard Cordray said.

    DeVry University is the only university whose former students qualify for the relief that still offers classes, the Education Department said. This action is the first time the agency has used the borrower defense program to forgive loans of former students at an operating university, The Wall Street Journal reported.

    Content created by Harry Wilmerding

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