The Department of Education announced yesterday that it is canceling $415 million in student loan debt under the borrower defense to repayment plan, including the debts of 1,800 former students of DeVry University. This marks the first time that the Education Department has canceled the student loans for a for-profit university that was still in business. Prior to yesterday’s announcement, only students who attended for-profit universities that had closed down were able to have their student loan debts discharged. The Education Department said that DeVry “made widespread substantial misrepresentations about its job placement rates,” which is why it was canceling those debts.
Yesterday’s announcement raises the amount of student loans that have been canceled during the Biden Administration to more than $16 billion, affecting nearly 700,000 individuals.
“The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” said U.S. Secretary of Education Miguel Cardona, in a statement. “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.”
While it promoted that 90% of its students found jobs in their field of study within six months of graduation, the placement rate for DeVry graduates was actually closer to 58%, according to the Department of Education.
The Department also said that it is working on new regulations and plans to improve the borrower defense to repayment program, as well as other discharge programs maintained by the Education Department. “This includes writing a new borrower defense regulation, proposing to re-establish a gainful employment regulation to hold career training programs accountable for unaffordable debt, and proposing to create financial triggers so that the Department has monetary protection against potential losses, including borrower defense liabilities,” it said in the release.
