President Biden Will Reportedly Cancel $500 Million In Student Debt For Victims Of For-Profit School Fraud
Under the Biden administration, the Department of Education will cancel $500 million in student loan debt for 18,000 students defrauded by the now defunct for-profit college, according to CNN.
The student loan forgiveness will be granted through the Borrower Defense to Repayment program for students defrauded by ITT Tech , making this another step the Biden administration is taking to address a backlog of more than 100,000 forgiveness claims left over from the Trump administration.
ITT Tech shut down in 2017 after the government pulled its federal funding. The school reportedly misled students about how much they could expect to earn after graduating and about the ability to transfer credits, the Department of Education said. Secretary Cardona said in a statement, “Our action today will give thousands of borrowers a fresh start and the relief they deserve after ITT repeatedly lied to them. Today’s action is part of the Biden-Harris Administration’s continued commitment to stand up for borrowers when their institutions take advantage of them. Many of these borrowers have waited a long time for relief, and we need to work swiftly to render decisions for those whose claims are still pending. This work also emphasizes the need for ongoing accountability so that institutions will never be able to commit this kind of widespread deception again.”
According to the statement, the Department of Education will start to notify borrowers of their approvals in the coming weeks and will then work “expeditiously” to cancel the loan balances for these borrowers.
As CNN notes, the announcement comes three months after the Biden administration said it would cancel $1 billion in student loan debt for about 73,000 defrauded students for the relief under former Education Secretary Betsy Devos but received only partial loan forgiveness after she changed the cancellation calculation.