Biden administration clears another $1.5B for defrauded college borrowers

Adam Barnes
·2 min read
7

Story at a glance

  • Education Department officials determined that the for-profit school “engaged in widespread misrepresentations about the value of its credentials for attendees’ and graduates’ employment prospects.”

  • The department will discharge the remainder of loans for students who enrolled in Westwood College between Jan. 1, 2002 through Nov. 17, 2015, regardless of whether they applied for relief.

  • “Westwood operated on a culture of false promises, lies, and manipulation in order to profit off student debt that burdened borrowers long after Westwood closed.”

The Biden administration announced Tuesday it is clearing the balances for 79,000 borrowers who were defrauded by the now-defunct Westwood College.

Education Department officials determined that the for-profit school “engaged in widespread misrepresentations about the value of its credentials for attendees’ and graduates’ employment prospects,” and will discharge the remainder of loans for students who enrolled between Jan. 1, 2002, and Nov. 17, 2015, regardless of whether they applied for relief.

Based on findings from the state attorney’s general of Illinois and Colorado, the department found that Westwood College “routinely misled” students about their job prospects and expected earnings after graduation.

Westwood’s criminal justice programs at its Illinois campuses promised job placement at police departments across the state, including the Chicago Police Department and Illinois State Police. Yet the college never had the regional accreditation to achieve their claim.

“Westwood College’s exploitation of students and abuse of federal financial aid place it in the same circle of infamy occupied by Corinthian Colleges and ITT Technical Institute,” Education Under Secretary James Kvaal said in a media release.

“Westwood operated on a culture of false promises, lies, and manipulation in order to profit off student debt that burdened borrowers long after Westwood closed,” Kvaal added.

Westwood operated 15 campuses in California, Colorado, Georgia, Illinois and Virginia, along with online programs before shutting its doors in 2016.

The administration’s latest borrower defense action will erase $1.5 billion in loan debt, bringing the total amount of loans discharged through the program to $14.5 billion.

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President Biden announced last week a plan to forgive up to $10,000 for every federal student loan borrower who earns less than $125,000 annually, and up to $20,000 for student borrowers who received Pell Grants during college.

Administration officials said around 20 million borrowers will see their debt erased if everyone eligible claims the relief.

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