US Wipes Out $55.6M in Loans Owed By Misled Students

Authored by thebalance.com and submitted by Sariel007

The Education Department said Friday it will forgive $55.6 million in loans owed by former students of three for-profit schools that took advantage of them with misleading representations.

Most of the 1,800 approved claims came from former students of Westwood College, which the department said misled people about their career prospects and their ability to transfer credits to other schools. Marinello Schools of Beauty misrepresented the type of instruction offered at its schools, and Court Reporting Institute misstated how long it would take to complete its program, the department said.

The claims, made under the Education Department’s borrower defense provision, were the first since 2017 involving students who did not attend Corinthian Colleges, ITT Technical Institute, or American Career Institute.

“The Department will continue doing its part to review and approve borrower defense claims quickly and fairly so that borrowers receive the relief that they need and deserve,” Education Department Secretary Miguel Cardona said in a statement. “We also hope these approvals serve as a warning to any institution engaging in similar conduct that this type of misrepresentation is unacceptable.”

Together with two larger rounds of forgiveness granted earlier this year, nearly 92,000 borrowers have now received more than $1.5 billion in borrower defense cases since President Joe Biden took office in January. Borrower defense lets people receive full or partial forgiveness of their student loans if their schools misled them or engaged in other misconduct. Borrower defense has existed since the mid-1990s but was rarely used until former President Barack Obama’s administration expanded the rules in 2016, when the closure of for-profit Corinthian Colleges caused an influx of claims.

Cardona has said he wants to take a more generous stance toward easing student loan debt, particularly in borrower defense cases. This represents a shift away from policies set by Cardona’s predecessor, Betsy DeVos, who under then-President Donald Trump enacted a stricter formula for judging the amount of forgiveness claims could receive. The Biden Administration is considering further changes to the rules on borrower defense as well as public input from a series of hearings in June.

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hanimal16 on July 10th, 2021 at 18:26 UTC »

I went to Everest College for medical billing and coding. They told me my diploma was the “equivalent” of an associate’s degree. My externship was at a chiropractor; little did I know at the time, that was useless on a resume when trying to find a job for which I was trained. I graduated with honors and it meant absolutely nothing. That was 2010. I have never billed a medical claim in my life since practicing in school. To this day I am a little over $15,000 in debt to the department of education and despite my attempts to better myself and get (what I thought) was a decent education that would get me ahead in life, I worked $15-$16/hour jobs as a medical receptionist for 8 years thinking that would eventually get me into medical billing by working my way up, but that didn’t pan out. The silver lining in all this is that I’ve qualified for hardship deferment so my loans aren’t in default, however still collect interest. Per the department of education, my school or perhaps the time I went to school, doesn’t allow me to qualify. I think it’s great if other students can get their predatory education loans forgiven even if I didn’t qualify.

Calitalian on July 10th, 2021 at 17:20 UTC »

DeVry next please.

KingNewbie on July 10th, 2021 at 14:52 UTC »

Why not make the schools pay them back?