Biden administration to cancel another $415M in student loans held by defrauded borrowers

The U.S. Department of Education announced Wednesday that an additional 16,000 borrowers will receive a collective $415 million in debt cancellation, which adds to the $15 billion in federal student loans forgiven during President Joe Biden’s presidency. This is one of several rounds of student loan forgiveness for defrauded borrowers. Currently, about 43 million borrowers hold a collective $1.61 trillion in federal student loan debt.

More than 20% of this round of forgiveness will go to borrowers who attended DeVry University. The Education Department found that from 2008 to 2015 the university “repeatedly misled prospective students across the country,” by advertising a much higher job placement rate than reality. 

The remaining balance of this latest round of forgiveness will go to borrowers who attended other institutions that deceived borrowers including Westwood College, ITT Technical Institute, Minnesota School of Business/Globe University, Corinthian Colleges, and Marinello Schools of Beauty. These schools were included in previous rounds of forgiveness for defrauded borrowers.

“The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” Secretary of Education Miguel Cardona said in a statement announcing the forgiveness round. “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.”

Why DeVry

Under this round of forgiveness, approximately 1,800 former DeVry students will receive $71.7 million in borrower defense discharges. The Education Department found that DeVry advertised the school as “Career Placement University” with a 90% job placement rate. In actuality, though, the school’s job placement rate was just about 58%.

DeVry included jobs that students already had before graduating, which shouldn’t have been “attributable to a DeVry education,” according to the Education Department. Forgiveness will go to borrowers who “relied upon DeVry’s misrepresentation in deciding to enroll.”

Who else gets forgiveness in this round

On top of the 1,800 borrowers who attended DeVry, another 14,000 people will receive a collective $343.7 million in forgiveness. These borrowers attended the schools listed above. 

Before Wednesday’s announcement, more than 188,000 borrowers who attended now-defunct schools or those people who are now deemed as having taken part in deceptive or illegal practices have benefited from $2.6 billion in forgiveness.

“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 a statement. “Moving forward, we intend to expand our collaboration with federal and state partners to serve students.”