The Department of Education said this week that almost 16,000 borrowers who were allegedly deceived by for-profit institutions will have $415 million in federal student loans cancelled.
Borrowers from DeVry University, ITT Technical Institute, Westwood College, and the Minnesota School of Business/Globe University will be eligible for relief under a legal provision known as borrower defense, which allows individuals to discharge some or all of their student loan debt if their school misled them or otherwise engaged in misconduct.
“The department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” Education Secretary Miguel Cardona said in a statement Wednesday.
Between 2008 and 2015, the department discovered that DeVry University, a for-profit university based in Illinois, deceived students by saying that 90 percent of its alumni actively pursuing employment obtained work in their field of study within six months of graduation. According to the department, the job placement rate was closer to 58 percent.
Because they “relied on DeVry’s deception in deciding to enroll,” the administration has identified nearly 1,800 debtors who will be entitled for more than $71 million in discharges. As the agency continues to assess pending claims from former students, the number of debtors who qualify for discharge is projected to rise. All debtors who have claims that have been authorized will be fully compensated.
“Students count on their colleges to be truthful,” Cardona said. “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.”
Devry’s senior director of university relations, Donna Shaults, emphasized in a statement that the institution’s board of directors and administration had changed since 2015.
Nonetheless, she insisted that the government had misrepresented the university.
“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.
In total, the Biden administration has authorized roughly $2 billion in loan forgiveness for over 100,000 students who have been accused of being cheated by their colleges.