Biden Admin To Strap Taxpayers with $415 Million In Student Loan Debt it Will ‘Cancel’

The Biden administration announced Wednesday it 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 (DOE) said in a press release.

The DOE found that DeVry University, Westwood College, ITT Technical Institute nursing school and Minnesota School of Business/Globe University provided false information regarding their graduates’ job placement.

“The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” U.S. Secretary of Education Miguel Cardona said in the press 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 DOE 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.

An additional $284.5 million in discharges will be allocated to 11,900 former students who attended such schools as Corinthian Colleges and Marinello Schools of Beauty who previously qualified for borrower defense relief but had not yet applied for it, the DOE 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 press release.

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

DeVry University is the only university whose former students qualify for this relief that still offers classes, the DOE said, and Thursday’s action is the first time the DOE has used the borrower defense program to forgive loans of former students at an operating university, The Wall Street Journal reported.