A Gen Xer got $112,000 in student loans forgiven after paying off a 'worthless degree' for over a decade. Now she can enter retirement debt-free.

• Sheila Reed, 57, got $112,000 in student loans forgiven last year.

• The relief was part of a federal discharge for students of Westwood College and other for-proft schools.

• Reed can now save for retirement without carrying the six-figure burden.

Sheila Reed, 57, is no longer facing a lifetime of student-loan payments.

While Reed dropped out of higher education right after high school, she went back in the early 2000s after seeing a TV commercial for the for-profit school Westwood College. She decided to give herself a shot at her goal of working in law enforcement and enroll.

But the program did not deliver on its promises. Reed said that while her instructors told her she would easily land a job in law enforcement, she was consistently denied jobs in the field. Since graduating in 2007, she has never been able to use her bachelor's degree. She only had a $112,000 student-loan balance to show for it.

"It was hell. It was really rough. I didn't think I would ever, ever get rid of it. It was depressing at times," Reed told Business Insider. "I can't get into the field I want to get in. And so I felt like I just wasted my time and wasted what money I had."

Reed was unable to afford her monthly payments for certain periods of time, forcing her to put her loans on forbearance. During this period, she was not required to make payments, but interest was still surging her balance. For all she knew, she thought she would be on the hook for payments for the rest of her life.

That all changed on March 29, 2023, when Reed received a letter —reviewed by BI — from the Education Department informing her that her entire student-loan balance was forgiven. The relief was a result of a group discharge through the borrower defense to repayment, a process that cancels student loans for borrowers if the school they attended is found guilty of fraud.

Westwood shut down in 2016, and in 2022, the Education Department released a report stating that the school "routinely misled prospective students by grossly misrepresenting that its credentials would benefit their career prospects and earning potential."

Reed did not have to file a borrower defense application herself and was instead part of a group the department determined qualified for relief based on its findings of the school.

"I was floored," Reed said. "I almost passed out. I kept rereading it and checking who the sender was to confirm it wasn't a scam. I really couldn't believe it."

Reed is among millions of student-loan borrowers who have received debt relief from the Education Department over the past few years, either through borrower defense, Public Service Loan Forgiveness, or other fixes to repayment programs. While Reed intended to repay her loans as long as her financial situation could sustain them, the relief allowed her to finally look forward to retirement without the debt hanging over her head.

"Retirement is not that far away anymore. I'm getting closer to 60, and that's one thing I don't have to worry about anymore," Reed said. "I will not have a student loan when I die."

'I'm just glad it's over'

Reed didn't know she would struggle so much to pay off her student loans. She never would have pursued a degree if she didn't think she would be able to use it.

"Even though it turned out to be a worthless piece of paper, I'm so proud of myself that I graduated, and I graduated with honors, and I did learn a lot about the different law enforcement fields and prison systems and everything," she said.

"So, in that respect, I don't regret it. But financially, I do, and I'm just glad it's over," she added.

Along with Westwood, the Education Department has enacted group discharges for other major for-profit chains it found guilty of fraud and misrepresentations, including Corinthian Colleges and ITT Technical Institute. While Republican lawmakers have criticized the administration for its debt relief efforts, calling it an overreach of authority, Democrats have called for accountability over the for-profit school system to ensure borrowers are not stuck with big debt loads absent a valuable degree.

Reed said she's disappointed her decision to return to school didn't pay off. But with the relief, she can now begin to save money as she nears retirement and is grateful her student loans are in the rearview mirror.

"Now, when I do think about the student loans, I think of them being discharged," she said. "Not all the other rigmarole that I had to go through to get to this point."

Did you receive student-loan forgiveness? Are you struggling with student-loan payments? Share your story with this reporter at asheffey@businessinsider.com.

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