Secretary of Education Miguel Cardona Wednesday announced the department would repay $415 million in student loans to borrowers who were defrauded by for-profit colleges including DeVry University.
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Feb. 16 (UPI) -- The Biden administration on Wednesday granted $415 million in student loan forgiveness to nearly 16,000 borrowers who were misled by for-profit colleges.
Among the borrowers to receive loan forgiveness Wednesday were 1,800 former DeVry University students as the Department of Education said in a statement that it found the institution made "widespread substantial misrepresentations about its job placement rates."
The Education Department said the claims were the first under a legal statute known as borrower defense, which promises loan forgiveness to borrowers who have been defrauded by an institution that is presently operating.
"The Department will seek to recoup the cost of the discharges from DeVry," it said in a statement. "The Department anticipates that the number of approved claims related to DeVry will increase as it continues reviewing pending applications."
Feb. 16 (UPI) -- The Biden administration on Wednesday granted $415 million in student loan forgiveness to nearly 16,000 borrowers who were misled by for-profit colleges.
Among the borrowers to receive loan forgiveness Wednesday were 1,800 former DeVry University students as the Department of Education said in a statement that it found the institution made "widespread substantial misrepresentations about its job placement rates."
The Education Department said the claims were the first under a legal statute known as borrower defense, which promises loan forgiveness to borrowers who have been defrauded by an institution that is presently operating.
"The Department will seek to recoup the cost of the discharges from DeVry," it said in a statement. "The Department anticipates that the number of approved claims related to DeVry will increase as it continues reviewing pending applications."
According to the department's findings, DeVry claimed from 2008 to 2015 that 90% of its graduates who actively seek employment obtained jobs in their field of study within six months of graduation, when in reality its job placement rate was about 58%.
"The Department found that more than half of the jobs included in the claimed 90% placement rate were held by students who obtained them well before graduating from DeVry and often before they even enrolled," the department said.
DeVry in 2016 agreed to pay $100 million to settle federal charges that said it recruited prospective students with deceptive advertisements that cited false employment success rates and income levels for students who graduated.
In addition to the DeVry cases, the Education Department provided $53.1 million in borrower defense payments to 1,600 borrowers who attended Westwood College, $3.1 million to approximately 130 students at ITT Technical Institute's nursing program and $3 million to 270 borrowers who attended Minnesota School of Business/Globe University after finding all three now-defunct institutions similarly misled borrowers.
Another $284.5 million in discharges was also issued to more than 11,900 students who attended institutions such as Corinthian Colleges, about which the Education Department previously released findings.
To date, the Education Department has issued $2 billion in borrower defense repayment to more than 107,000 borrowers, it said Wednesday.
"The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards," U.S. Secretary of Education Miguel Cardona said.
"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," Cardona said.
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