Biden cancels $130 million debt for ‘ripped off’ students.
Biden cancels $130 million debt for 'ripped off' students.
Biden administration forgives $130 million in student debt for CollegeAmerica borrowers
The Biden administration has taken a significant step in delivering on its promise to rebuild the middle class and support hardworking American families by forgiving $130 million in student debt for 7,400 borrowers who attended CollegeAmerica, a now-defunct private school based in Colorado. This move comes after allegations that the school’s parent company, the Center for Excellence in Higher Education (CEHE), misrepresented graduates’ salary, employment rates, and other essential information.
A troubled institution
CollegeAmerica closed its doors abruptly in 2021, after losing its accreditation. However, CEHE, the parent company, still continues to operate. The closure was not the end of its woes, as the Colorado attorney general’s office had been investigating CEHE and its state leadership since 2012. This investigation led to a bench trial in 2017, which resulted in a judgment in favor of the state. Current Colorado Attorney General Phil Weiser explained that a Denver District Court judge found that CollegeAmerica’s marketing and admissions operations violated state consumer protection and consumer lending laws in August 2020.
Misrepresentations and the involvement of the Department of Education
The state’s attorney general approached the Department of Education (DOE) in 2022, while the case was being appealed, with a request to cancel loans for qualifying students and return the money paid by former students to the DOE. The DOE, during its own investigation, discovered that CEHE had indeed misrepresented various aspects, including salaries and employment rates of its graduates, the programs it offered, and the terms of a private loan product.
Debt relief for deserving borrowers
President Joe Biden expressed his commitment to supporting hardworking American families, stating, “These borrowers were lied to, ripped off, and saddled with mountains of debt.” He announced the forgiveness of $130 million in debt for the 7,400 student borrowers who attended CollegeAmerica in Colorado. This move is a significant step towards addressing the injustice faced by these borrowers.
The larger context and challenges
It’s important to note that the Biden administration recently faced a setback when the U.S. Supreme Court struck down its plan to forgive up to $20,000 of student debt per borrower for over 40 million Americans. Nevertheless, the administration has approved $14.7 billion in debt relief for 1.1 million student loan borrowers who were taken advantage of or affected by abrupt closures of their colleges, including Corinthian Colleges and DeVry University.
- U.S. regulators propose increasing bank capital
- US congressional committee unable to agree on stablecoin bill, says...
- ECB discussed increasing banks’ mandatory reserves in the bat...
Conclusion
The forgiveness of $130 million in student debt for CollegeAmerica borrowers demonstrates the Biden administration’s commitment to easing the financial burden on borrowers who were victims of deceptive practices. It serves as a reminder that transparency and accountability in higher education institutions are essential to protect students and ensure their success. While more work needs to be done to address the overall student debt crisis, this action brings hope and relief to thousands of borrowers, allowing them to move forward in rebuilding their lives and pursuing their dreams.
Recommended Reading:
- $39 Billion in Federal Student Loans Will Now Be Forgiven
- How Long it Actually Takes to Pay Off Student Loans
- Your Monthly Student Loan Payments Could Be Slashed in Half