Less than a week after the Biden administration announced greater student loan forgiveness of up to $20,000, the Education Department said Tuesday that another $1.5 billion in student debt is being forgiven.
79,000 former students of the private, for-profit Westwood College, which shuttered in 2016, will be fully relieved of their debt. Evidence, according to the department, “shows the institution engaged in pervasive misrepresentations regarding the value of its credentials for attendance’ and graduates’ career prospects,” it stated in its release.
According to Under Secretary James Kvaal, “Westwood operated on a culture of false promises, deception, and manipulation in order to benefit from student debt that plagued borrowers long after Westwood closed.”
The initiative is the most recent attempt to assist students who were taken advantage of by schools. According to the agency, Westwood students won’t need to submit a borrower defense claim since the discharges would occur automatically.
The government said that Westwood, which operated campuses in five different states and also provided online instruction, “often deceived prospective students by blatantly misrepresenting that its certificates would boost [their] professional prospects and earning potential.” According to the government, the school made deceptive claims about the salaries of graduates and the likelihood that they would find employment in their profession within six months, as well as promises that it would cover students’ debts if they were unable to find employment within that time frame.
The department collaborated with the attorneys general of Illinois and Colorado, whose investigators gathered data from “sworn statements from former students and workers, admissions call records, multi-media advertising, and Westwood’s internal communications, procedures, and trainings.”
Prior to this, the government has forgiven debt for students who attended the for-profit ITT Technical Institute for $3.9 billion and Corinthian Colleges for $5.8 billion.
The Biden administration has changed direction, wiping off $34 billion in debt for over 1.7 million borrowers under a policy known as “borrower defense.” The Trump administration had changed Obama-era standards to make it harder for borrowers to claim they were scammed by students.
The total cost of the wider student debt relief, which includes $20,000 for recipients of Pell Grants ($10,000 for borrowers earning up to $125,000 annually), is anticipated to be $519 billion. It will benefit 43 million borrowers.
President Biden’s unilateral move has been met with opposition from certain politicians, who claim it is unfair to people who have paid off their student loans or did not attend college and does not address the true cost of higher education. The White House responded to some of its detractors on Twitter by providing a breakdown of each Republican lawmaker’s pandemic relief debt forgiveness under the Paycheck Protection Plan.
The Education Department said on Tuesday that it will propose new regulations to hold professional programs responsible as well as additional sanctions against organizations they claim are to blame for the student debt issue, “including releasing lists of the worst perpetrators.”