Thousands of former students in America have filed fraud cases against universities or colleges. Due to high demands to erase student debt, Many will have the chance to cut their loan debts as the U.S. Department of Education approved $415 million total in borrower defense claims.
On Wednesday, The U.S. Department of Education announced that nearly 16,000 student borrowers would receive $415 million in aid. After finding multiple schools misled eager students, the legal provision ensures loan relief will be provided for defrauded borrowers.
Devry University, Westwood College, ITT Technical Institute (ITT), and Minnesota School of Business and Globe University were some institutions that misrepresented their hiring and job placement rates to students.
BREAKING: President Biden’s Education Department has CANCELED another $415 MILLION in federal student loan debt owed by nearly 16,000 borrowers who were misled by for-profit colleges.
— Jon Cooper (@joncoopertweets) February 17, 2022
"The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards. 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," Miguel Cardona said, U.S. Secretary of Education, in a statement.
— Data for Progress (@DataProgress) February 11, 2022
Today's decisions bring the total amount of approved relief to an estimate of $2 billion for more than 107,000 borrowers.
"When colleges and career schools put their own interests ahead of students, we will not look the other way," Richard Cordray said, Federal Student Aid Chief Operating Officer. "We are grateful to have strong enforcement and oversight partners, such as the Federal Trade Commission and attorneys general in Colorado, Illinois, and New Mexico. These offices provided key evidence that played a significant role in reaching the findings announced today. Moving forward, we intend to expand our collaboration with federal and state partners to serve students."
From 2008 to 2015, DeVry advertised that 90% of its graduates would obtain jobs in their field of study within six months of graduation. The Department of Education found the advertisements to be false and that DeVry's actual job placement rate was around 58%.
After further review, the Department found that senior DeVry officials knew the 90% job placement rate was inaccurate due to alumni speaking out before this investigation. Donna Shaults, a spokesperson for DeVry University, expressed that the leadership had changed before the federal government first made the allegations.
"Nonetheless, we do believe that the Department of Education mischaracterizes DeVry's calculation and disclosure of graduate outcomes in certain advertising, and we do not agree with the conclusions they have reached," Shaults said.
Roughly 200,000 former students have requested that their federal student loans be discharged after their schools made false promises.