Thursday 27 July 2023

Biden admin forgives $130 million in federal student loans for thousands of borrowers who attended private career school

 The Biden administration's Department of Education announced on Tuesday that it would forgive approximately $130 million in federal student loan debt for thousands of borrowers who attended a private career school in Colorado.

An Education Department press release declared that students who attended CollegeAmerica between January 1, 2006, and July 1, 2020, would receive "automatic relief." The announcement impacts roughly 7,400 former students.

As a result of evidence collected by Colorado Attorney General Phil Weiser, the ED concluded that CollegeAmerica's parent company, the Center for Excellence in Higher Education, perpetuated "widespread misrepresentations about the salaries and employment rates of its graduates, the programs it offered, and the terms of a private loan product it offered."

The school, which had locations in Colorado and Arizona, offered students associate and bachelor's degrees in business, computer technology, computer science, and medical assisting.

Weiser, who started his investigation into the school in 2012, claimed it "knowingly took advantage of students by luring them into high-priced, low-quality programs with promises of high-earning potential and job placement that it knew were not attainable." 

"They basically tried to get people to sign up for degree programs that they knew weren't going to deliver the results that they were promising. The internal data they had showed that students weren't making this money, they didn't get these jobs and they actually weren't even getting the training they were promised," Weiser stated. 

The investigation found that the school advertised that graduates would make high salaries but, on average, they earned only $25,000 five years after completing their programs. The school also claimed its private loan product was "affordable" despite up to 70% of borrowers falling into default.

The ED touted the "strong partnership" with the state AG for aiding its investigation efforts to crack down on "predatory schools."

The department reported that the Biden administration has already approved over $116 billion in federal student loan forgiveness to 3.4 million borrowers. Most notably, last year, the administration canceled $3.9 billion in student loan debt for students who previously attended ITT Technical Institute, similarly claiming the school misrepresented the value of its programs.

Federal student loan payments already received by the department will be refunded, and any remaining balances will be forgiven.

"This announcement means a clean slate for thousands of students hurt by CollegeAmerica's widespread misconduct," said Richard Cordray, the ED's Federal student aid chief operating officer. "The close partnership between the Department of Education and Attorney General Weiser's office made this action possible. We will continue to work to deliver targeted student loan relief to borrowers whose schools take advantage of them."

The Center for Excellence in Higher Education did not respond to a request for comment, Fox News Digital reported.

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