Biden administration to give full debt relief to students scammed by private for-profit colleges

The Biden administration has begun to step back from the Trump-era stance on students defrauded by for-profit colleges. The US Department of Education said on Thursday it was rejecting former Education Secretary Betsy DeVos’ guidance on student loan relief and would go for a more streamlined approach by giving full relief to borrowers.

The first course of action will be to provide total debt relief to approximately 72,000 borrowers who have been defrauded by Corinthian Colleges and ITT Technical Institute.

“Lifestyle change”

A senior education ministry official said a review of the DeVos-era formula did not provide an “appropriate level of relief for borrowers,” adding that there was “clear evidence” that ‘they had been exploited.

“Today’s announcement means that tens of thousands of defrauded student loan borrowers will finally get the debt relief they are legally entitled to receive,” said President Robert C. “Bobby.” Scott (D-VA) on the decision.

“It has been over four years since the Ministry of Education first concluded that these students had been deceived by their institutions and deserved full debt relief. Unfortunately, instead of just processing loan cancellation requests, the previous administration refused to accept the findings of its own staff and stayed the action on behalf of these defrauded borrowers.

Despite a slew of congressional hearings, public pleadings, court orders, and a dazzling surveillance report, DeVos stuck to what Scott called an “absurd formula that only provided a fraction of the relief that borrowers deserved ”.

“For more than four years, defrauded borrowers and their families have lived under a cloud of student debt that they shouldn’t have to pay off,” Scott said. “This announcement is changing the lives of tens of thousands of people across the country. ”