Students defrauded by for-profit colleges to get millions in loan repayments | Education

WASHINGTON — The U.S. Department of Education announced Wednesday that nearly 16,000 student borrowers will receive millions in loan repayments, after the department discovered four private, for-profit institutions made misleading claims about their placement rates .

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

“Students rely on their colleges to tell the truth. Unfortunately, today’s findings show too many cases of students being misled by loans from institutions or programs that failed to deliver on their promises.

Cardona said it was part of the Department of Education’s Targeted Borrower Defense Policy, which provides relief to students who have been defrauded.

The four institutions include DeVry University, which is based in Illinois but has 40 sites in 18 states; Colorado-based Westwood College, which closed in 2016; Indiana-based ITT Nursing, which filed for bankruptcy in 2016; and the Minnesota School of Business/Globe University, which closed in 2017.

“Today marks the first findings against a school, DeVry University, which is open and continues to enroll new students,” said Federal Student Aid Chief Executive Officer Richard Cordray, representing the department, on a call with reporters.

Cordray said students who attended DeVry University from 2008 to 2015 can file complaints with the department. DeVry claimed that 90% of his graduating students found employment, when the placement rate was actually around 58%.

The department will approve $71.1 million in borrower defense costs for approximately 1,800 former DeVry students.

“In this case, we reviewed extensive evidence showing that DeVry had significantly misstated his placement rates and the likelihood of students finding new jobs in their field of study after graduation,” he said. he declares.

DeVry officials could not be reached for comment.

Cordray said that from 2007 to 2016, officials at the ITT Technical Institute lied to students seeking to enroll in its associate nursing degree program.

“The program was not accredited,” he said. “And the students could not get the benefit they were promised from their course (of) study.”

The department expects to approve approximately $3 million for 130 students. This is the fourth time the department has issued waivers to students who attended this institution, totaling $660 million in waivers for approximately 23,000 students who attended ITT Tech during those years.

Student borrowers who have completed criminal justice programs at the Minnesota School of Business and/or Globe University will be entitled to a full discharge of the borrower’s defense, department officials said. The department has already approved about $3 million in furloughs for 270 students.

The department also approves $284.5 million in waivers to more than 11,900 student borrowers who attended beauty schools such as Corinthian Colleges, which closed in 2015, and Marinello Schools of Beauty, which closed in 2015. .

Cordray said the department also found that Westwood College misled students about graduate placement rates of 80% or more and falsely claimed graduates would earn salaries of $50,000 or more. The department found that the salary data was based on national federal data and that graduates of the institution made half or less of those salary claims.

The Department of Education will approve approximately $53.1 million for 1,600 student borrowers who submit these applications.

During the Biden administration, the Department of Education handed out more than $2 billion in borrower defense waivers.

Last yearthe department announced that more than 323,000 borrowers with permanent disabilities would receive $5.8 million in automatic student loan discharges.

The Biden administration has resisted calling on lawmakers to forgive up to $50,000 of federal student loan debt per student. The Federal Reserve estimates that total US student debt is over $1.75 trillion. The Ministry of Education owns approximately 92% of that student loan debt.

White House press secretary Jen Psaki said in a Tuesday briefing that Biden had “forgiven $15 billion in student loans, benefiting more than 675,000 student borrowers since he took office.” functions”.

As part of Biden’s campaign platform, he said he would forgive up to $10,000 per student in federal student loans, but he didn’t order the Department of Education to provide that. change. Biden has said he wants Congress to introduce legislation to cancel up to $10,000 in debt per student for him to sign the law.

PSAki also pointed to the pause in student loan repayment due to the coronavirus pandemic.

“No one was required to pay a single penny in federal student loans, and he extended the suspension of payments until May to give people some extra breathing room,” she said.

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