Ministry of Education approves 1,800 additional borrower defense requests
The Education Department continues to deal with its backlog of requests from borrowers claiming they shouldn’t have to repay their student loans, announcing on Friday that it has provided an additional $ 55.6 million in funding. helping students from three closed institutions who have made “widespread and substantial misrepresentation” about their programs.
Over 1,800 applications have been approved for borrowers who attended Westwood College, Marinello Schools of Beauty and the Court Reporting Institute. Borrowers will receive a 100 percent loan discharge.
The department found that Westwood College had distorted students’ ability to transfer their credits to other institutions, meaning those who attended would have to resume their studies elsewhere. Westwood also told students in his criminal justice program that they could find jobs as police officers in Illinois, but the Chicago Police Department and other law enforcement agencies did not accept. the Westwood credits.
Students who attended Marinello Schools of Beauty said the institutions failed to train them in key elements of cosmetology, such as how to do haircuts. Marinello also left students without instructors for weeks or months at a time, the department found.
The Court Reporting Institute has misrepresented the time it would take for students to complete its program, and the majority of students who attended the institution never completed or became court reporters, according to the department – only 2 in 6 for one hundred of the students have actually graduated from CRI.
Latest approvals increase the amount of relief the ministry has given to students with borrower defense claims in recent months, which now stands at over $ 1.5 billion in total loan cancellations for nearly 92,000 borrowers. In March, it granted $ 1 billion in debt relief to borrowers who had previously received only partial relief, and last month it approved applications from borrowers who attended the Institute. ITT technique.
The Education Department no longer processes borrower defense claims as it did under the Trump administration, when the department calculated the harm to students caused by deceptive institutional practices and provided only proportionate redress to this prejudice. This approach has merit in theory but has not worked in practice, adding to a backlog of claims, said Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators.
“What I see the Biden administration doing is come in and recognize, ‘We’re cleaning up the bridge so these students have closure,'” Draeger said. “And just forgiving the debt becomes the fairest thing we can do, because otherwise they’re just hanging out in this kind of perpetual limbo.”
the most recent data available show that the ministry still had over 107,000 borrower defense claims to consider at the end of April. Draeger said that as long as there is a backlog, he expects the Biden administration to continue to act quickly to resolve the claims. Education Secretary Miguel Cardona reiterated that on Friday in a press release.
“The department will continue to do its part to review and approve borrower advocacy requests quickly and fairly so borrowers get the help they need and deserve,” Cardona said. “We also hope that these approvals serve as a warning to any institution engaging in similar conduct that this type of misrepresentation is unacceptable.”
In particular, the ministry considered and mentioned the property of each of the institutions in its announcement. This hasn’t been done traditionally, said Julia Barnard, a researcher at the Center for Responsible Lending, noting that CRL was happy to see individual owners held accountable.
But the Biden administration could do more to help defrauded students, such as providing collective discharges to students who attended those institutions but did not seek the borrower’s defense to repayment, Barnard added.
“We are very pleased that the Biden administration is now taking a proactive approach to releases, but we believe this is a low bar given that these are limited releases for people who have the ability and means to file claims, ”Barnard said. .