Nearly 16,000 student loan borrowers will see their collective $415 million loan debts cleared after the Department of Education found their universities misled them about job prospects after graduation.
On Wednesday (February 16), the Department of Education announced that many of the thousands who filed fraud complaints against their educational institutions will receive the multi-million borrower defense –– the legal provision that guarantees loan relief for defrauded borrowers.
Among the colleges accused of lying is DeVry University, Westwood College, the nursing program at ITT Technical Institute, the criminal justice programs at Minnesota School of Business/Globe University and Corinthian Colleges, The Hill reported.
An estimated 1,800 DeVry student borrowers will receive $71.1 million in borrower defense after the DOE says the school lied about its job placement rate –– it claimed 90% of grads found jobs within six months of graduation when the actual rate was around 58%.
“The Department is committed to giving borrowers discharges when the evidence shows their colleges violated the law and standards,” DOE Secretary Miguel Cardona said in a statement.
“Students count on their colleges to be truthful. Unfortunately, today’s findings show too many instances in which students were misled into loan at institutions or programs that could not deliver what they promised.”
Advocates have been pushing the Biden-Harris administration to consider student loan relief for all borrowers as the crisis paired with economic recovery from the pandemic and rising inflation hits the wallets of millions.
One study showed that student debt cancelation could boost Black wealth by as much as 40%. Additionally, Black people –– particularly Black women –– shoulder more debt than other borrowers while experiencing wage gaps and higher rates of unemployment.