Feb 16, 2022 - Politics & Policy

Department of Education approves debt relief for students misled by colleges

Devry University
The DeVry College of New York, part of DeVry University. Photo: Richard Levine/Corbis via Getty Images

The Biden administration will erase $415 million of student debt for almost 16,000 borrowers who were misled by their colleges, the Department of Education announced Wednesday.

Why it matters: These borrower defense discharges are the first to go to students who attended a university that is still operating, per the press release.

  • "This is an important step because to date, all other discharges have come after institutions closed," James Kvaal, the undersecretary of education, said on a call with reporters Wednesday afternoon.

The big picture: The borrowers receiving debt relief attended DeVry University, the ITT Technical Institute and other schools.

  • The move is based on three new findings, as well as a finding from January and previous findings, per Kvaal.
  • The debt is being forgiven under the Borrower Defense to Repayment policy, which allows students who were defrauded by their college to seek debt relief.

State of play: Roughly 1,800 former DeVry University students will receive about $71.7 million in full borrower defense discharges after the Education Department found that from 2008 to 2015 the school "repeatedly misled prospective students" about graduates' job placement rates, per the press release.

  • DeVry had told prospective students that their job placement rate for graduates was 90%, when in fact the statistic was closer to 58%.
  • The department also found that from 2002 to 2015, Westwood College made false claims about graduates' job placement rate and salary potential. Around 1,600 borrowers will receive about $53.1 million in full discharges as a result.
  • From 2007 to 2016, the ITT Technical Institute misled students looking to enroll in its associate degree in nursing program, which the school falsely claimed was accredited. Subsequently, full discharges totaling $3.1 million will go to about 130 students.
  • The department also recently determined that students who attended the criminal justice programs at the Minnesota School of Business or Globe University would receive discharges, after being incorrectly told the programs would allow them to become probation or police officers.
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