Student loans

Department of Education writes off $415 million in student loan debt for 16,000 borrowers

The Ministry of Education announced this week that it would write off $415 million at the federal level student loans by nearly 16,000 borrowers allegedly misled by for-profit colleges.

Borrowers, who attended DeVry University, ITT Technical Institute, Westwood College, and Minnesota School of Business/Globe University, will receive relief through a statutory provision known as the defense of debt. borrower, which allows individuals to pay off all or part of their student loan debt. whether their school misled them or otherwise engaged in other misconduct.

“The department remains committed to granting discharges to borrowers when evidence shows their college has violated the law and standards,” Education Secretary Miguel Cardona said in a statement Wednesday.

The department found that between 2008 and 2015, DeVry University, an Illinois-based for-profit university, repeatedly misled students by claiming that 90% of its graduates actively seeking employed had landed a job in their field of study within six months of graduation. The placement level was actually closer to 58%, according to the department.

The department has so far identified about 1,800 borrowers who will be eligible for more than $71 million in waivers because they “relyed on DeVry’s misrepresentation in deciding whether to enroll.” The number of borrowers eligible for release is expected to increase as the department continues to review outstanding applications from former students. All borrowers whose claims are approved will receive full relief.

“Students rely on their colleges to be truthful,” Cardona said. “Unfortunately, today’s findings show too many cases where students have been misled by loans from institutions or programs that have failed to deliver on their promises.”

FILE – US Secretary of Education Miguel Cardona delivers remarks at the department’s Lyndon Baines Johnson Building on January 27, 2022 in Washington, DC (Photo by Chip Somodevilla/Getty Images)

In a statement, Donna Shaults de Devry, senior director of university relations, noted that the university’s board and leadership had changed since 2015.

Yet she argued that the university had been misrepresented by the government.

“We believe the Department of Education is misrepresenting DeVry’s calculation and disclosure of graduate results in some advertisements, and we disagree with the conclusions they reached,” Shaults said.

In total, the Biden administration approved about $2 billion in loan forgiveness for more than 100,000 students who were allegedly defrauded by their schools.

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