September 29, 2022

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16,000 More Borrowers Get $415 Million in Student Loan Relief

  • The Department of Education announced Wednesday that it was wiping out more student loan debt.
  • Students defrauded by private institutions like ITT Tech and DeVry University will see $415 million in relief.
  • This brings the total amount of loans relieved by the Biden administration to $2 billion.

Even more student loan borrowers will see their debt relieved, the Department of Education announced on Wednesday.

The department said that nearly 16,000 borrowers will see $415 million wiped out, including 1,800 former DeVry University students. Other borrowers from now-defunct ITT Technical Institute, Westwood College, and Minnesota School of Business/Globe University will also see relief.

“Students count on their colleges to be truthful,” Secretary of Education Michael Cardona said in a statement.
“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.”

The newest action brings the total amount of loans relieved by the Biden administration under borrower defense to repayment to $2 billion for over 107,000 borrowers, the Department of Education said.

The relief for DeVry students also marks a new development in relief. The Department of Education said these are the first claims to be approved for an institution that’s still operating — and that they “will seek to recoup the cost of the discharges from DeVry.” 

DeVry “repeatedly misled prospective students” from 2008 to 2015 with a claim that 90% of its graduates looking for employment found jobs in their field within six months of graduating, according to the Department of Education.

In reality, the Department of Education said, the actual job placement rate was around 58%.

“The Department found that more than half of the jobs included in the claimed 90 percent placement rate were held by students who obtained them well before graduating from DeVry and often before they even enrolled,” the department said in a press release. “These jobs were not attributable to a DeVry education and their inclusion was contrary to the plain language of the 90 percent claim.”

In 2016, the Federal Trade Commission (FTC) sued DeVry over ads about job placement. Both the FTC and the Department of Education ended up reaching settlements with the school.

In total, the department said that it’s identified about 1,800 DeVry borrowers who will see about $71.7 million in relief — and it expects to approve more claims as they continue to review them. 

“DeVry University is deeply committed to student success and has oriented our whole organization around helping people compete in a complex and changing labor market. As today’s announcement calls out, any student claims date back to advertising that was used between 2008 and 2015, predating DeVry’s establishment as an independent institution with a new Board and leadership,” Donna Shaults, senior director of university relations at DeVry University, said in a statement to Insider.

“Nonetheless, we do believe that the Department of Education mischaracterizes DeVry’s calculation and disclosure of graduate outcomes in certain advertising, and we do not agree with the conclusions they have reached.”

Beyond DeVry, 11,900 students from schools like Corinthian Colleges and Marinello Schools of Beauty will see $284.5 million discharged, the department said.

But the discharges still do not encompass a campaign pledge of President Joe Biden: Immediately wiping out $10,000 in student debt for federal borrowers. As Insider’s Oma Seddig and Ayelet Sheffey reported, Biden’s failure to act upon that vow has left many borrowers frustrated.