Forgiveness Of Student Loan Debt From For-profit Colleges
Student loan forgiveness releases you from paying federal student loans in full or in part that has been borrowed to support post-secondary education. Students who were defrauded or seriously mislead by their educational institution can apply to the Department of Education for loan forgiveness under the category of “Borrower defense”
The education department last week made progress by making reforms in the student-debt system by canceling student debt for more than 1800 borrowers who attended three institutes that make widespread exaggerated claims. Westwood College, Marinello Schools of Beauty and the Court Reporting Institute made false recruiting claims and left many students with empty hands after graduation with no employment, resulting in approximately more than $55 million in granted relief.
The Westwood college shut down in 2015. It was found to have made false claims regarding transfer credits to other institutes and misled students in finding the appropriate career, leaving students stuck in their careers. 1600 of those students will receive $53 million in debt relief.
The Marinello Schools of Beauty shut down in 2016 after the federal Government cuts to its funding. Marinello also made “Widespread, false claims about the type of education they offered to students” and 200 of those students will receive $2.2 million in debt relief.
The Department also approved 18 claims from the students of Court Reporting Institute who were lied to about the course duration and the time frame for training to become a court reporter. It was discovered that only about 6% of the students graduated and it took them much longer to complete graduation than the college said it would.
Another initiative taken by Biden’s Administration is approving 18000 loan forgiveness claims from former students of ITT Technical Institute, a chain that was shut down in 2016, after facing numerous sanctions from the Obama Administration. The new loan forgiveness policy will clear almost $500 million in debt.
According to “Miguel Cardona, the education secretary” The department will continue to receive and approve borrower defense claims quickly and fairly so that victims get the relief they need and deserve. He further says, the department plans to take additional actions including changes in regulation that have previously been made by former secretary Betsy Devos, which placed a huge burden on borrowers and formed strict policy regarding eligibility requirements for borrower defense claims.
How students can get loan forgiveness:
First and foremost, a student applying for getting relief under the borrower defense program must check eligibility requirements. You might qualify for debt relief if you believe that your school defrauded you in any of the following ways:
- Intentionally misrepresented facts and mislead you regarding your education program and made false promises regarding your future employment prospects
- Your school violated certain state laws and federal regulations, such as consumer protection statutes related to your loan or educational services.
In contrast, Claims that are not related to your loan or educational services are not eligible for borrower defense claims. You are also not able to submit a private claim for money paid out of your pocket. Nonetheless, watch this area for more updates, as Congress and various government departments focus on a plethora of student loan issues.