The Biden administration has taken significant steps to address the issue of federal student loan debt for individuals who attended for-profit colleges that engaged in deceptive practices. The recent cancellation of $130 mn in federal debt, on July 25, for 7,400 students who went to College America in Colorado highlights the government's commitment to providing relief to borrowers who were misled and taken advantage of by such institutions, ABC News reported on July 27.
"While my predecessor looked the other way when colleges defrauded students and borrowers -- I promised to take this on directly, and provide borrowers with the relief they need and deserve," Biden said in his statement on July 25.
The administration's actions extend beyond College America, as they have previously forgiven $14.7 bn in debt for nearly 1.1 mn borrowers who attended other for-profit colleges, including Corinthian Colleges and ITT Technical Institute. These institutions have since shut down, leaving many students burdened with substantial debt and uncertain job prospects.
The Department of Education's investigation into CollegeAmerica revealed numerous misrepresentations by the institution, including false claims about graduates' earning potential and job placement rates. Such practices left students with heavy debt loads and limited opportunities for career advancement.
While the Center for Excellence in Higher Education, which operated CollegeAmerica, has contested the Department of Education's actions through a lawsuit, the government remains committed to holding such institutions accountable for their predatory practices.
The debt relief provided by the Biden administration is a welcome measure for affected borrowers, regardless of whether they have filed a borrower defence to repayment application. This move demonstrates the administration's determination to protect borrowers from predatory lending and ensure that students are not burdened with unjust debts due to deceptive practices.
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