Student debt paid off for thousands cheated by nonprofit colleges Business և economics news

The Department of Education has announced that it is forgiving 18,000 loans to borrowers who have attended a nonprofit college that exaggerates the success of its graduates in finding jobs.

The U.S. Department of Education announced Wednesday that it is canceling student debt for thousands of borrowers who attended a chain of nonprofit colleges that exaggerated claims about its graduate success in finding work.

The Biden administration has announced it is approving 18,000 loan forgiveness lawsuits from former ITT students, a chain that closed in 2016 after the Obama administration imposed a series of sanctions. New loan outflows will clear more than $ 500 million in debt.

The move marks a step forward for the Biden administration in clearing the gaps in the Borrower Protection Program, which provides loans for students who have been cheated by their colleges. The lawsuits were filed during the Trump administration, which halted the program and began processing the lawsuits only after a federal court ordered it. There are now more than 100,000 pending lawsuits.

Announcing the new action, Education Secretary Miguel Cardona promised to continue to stand up for students who have been cheated by their schools.

“Our action today will provide a new beginning for thousands of borrowers, a relief they deserve,” Cardona said in a statement. “Many of these borrowers have been waiting a long time for their help. We need to work quickly to make decisions for those whose claims are not yet available.

This follows another round of loan outflows in March, when the Department of Education cleared $ 1 billion in federal student debt for 72,000 borrowers. These allegations all came from former nonprofit college students.

Borrower’s advocates welcome the new approvals, but call for immediate assistance to thousands of other students whose lawsuits are still pending, including many who have attended ITT Tech.

“It turns out that the Biden administration sincerely wants to help people who owe a debt of relief,” said Alex Elson, vice president of Student Protection and a Washington-based legal team. “But it is even more confusing that they are so reluctant to use their powers to immediately and automatically help countless additional borrowers who are still waiting.”

Borrower protection is part of a series of educational programs aimed at overhauling the Biden administration as it works to change the policies of the Trump era. Cardona is holding a series of hearings this month as its agency discusses changes to that policy and so on.

The Rarely program was rarely used until 2015, when the Department of Education received thousands of lawsuits from former Corinthian college students. The chain of lucrative colleges recently stopped the results of lying to students about employment rates.

Following the collapse of other nonprofit colleges in Corinth, the Obama administration moved to make it easier to repay student loans. But the overhaul was reversed by the Trump administration, which later wrote its own rules to make matters worse. While changing the rules, Betsy Davos, then-Secretary of Education, said it was too easy to forgive the loans.

Cardona began circumventing DeVos rules in March, when he repealed a resolution that allowed the Department of Education to grant only partial loans to students whose claims had been approved. All borrowers who have received assistance will now have their loans repaid in full.

Many of ITT Tech’s 18,000 claims were confirmed after the Department of Education found out that the company was lying about graduate employment prospects. The agency noted that the ITT “repeated a significant misrepresentation” that it could help students find work. In fact, many students say it is harder to find a job when they mention ITT in their resumes.

Other allegations were confirmed after the department found that ITT had misled students about their ability to transfer course credits to other colleges. The department notes that loans were rarely accepted elsewhere, leaving students with “no progress” in their academic careers.

Borrowers will be notified of their claims in the coming weeks, the agency said.

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