Loan incentive approved for more students looking to make a profit | Political news



COLLIN BINKLEY, writer at AP Education

On Friday, the US Department of Education announced that it would forgive student loans to more than 1,800 borrowers who attended three commercial colleges who filed false job applications and prevented many students from finding work.

The Biden administration is writing off more than $ 55 million in debt to former students at Westwood College, the Marinello School of Beauty and the Institute of Legal Accountability. All three networks have been shut down for years following allegations of fraud and deception in their advertisements.

This is another step in the Department of Education’s efforts to address backlog of claims through the Borrower Protection Program, which offers loan forgiveness to students who have been defrauded by their schools. When the Trump administration halted the program while it was rewriting the rules, applications piled up, leaving more than 100,000 pending claims currently on the waiting list.

“The Department will continue to contribute to the review and approval of borrower protection requirements quickly and fairly to ensure that borrowers get the help they need and deserve,” Education Minister Miguel Cardona said in a statement.

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He added that the new round of approvals should “serve as a warning to any institution engaging in such behavior against this kind of misrepresentation.”

Most of the recently approved applications are for former students of Westwood College, which had campuses across the country until it closed in 2015. The network advised students that their course could be transferred to other colleges, but often not, the Department of Education said. Because of this, many students are stuck starting their college careers after transferring.

The company also made false claims about the Illinois criminal justice program, saying alumni could get jobs as police officers in the Chicago area, the department said. But many police agencies did not accept loans from Westwood, resulting in many graduates taking minimum-wage jobs in other areas.

About 200 loan payments are for Marinello beauty schools, which closed in 2016 after the federal government cut funding. The college was unable to deliver the promised education, in some cases leaving students without instructors for months, the department said. As a result, some beauty students never learned key skills like cutting hair, and many struggled to pass government licensing exams.

The department approved 18 claims from the Judicial Reporting Institute, which was based in Washington, California, and Idaho until it closed in 2006. It was discovered that the college lied about the amount of time it took to complete their studies to become a court reporter. The department found that only about 6% of the students graduated, and those who graduated took much longer than they claimed in college.

Last month, the Biden administration wrote off the student debt of more than 18,000 borrowers from ITT, another defunct commercial college. And in March, he paid off $ 1 billion in debt to former ITT and Corinthian college students. In total, the administration satisfied claims totaling $ 1.5 billion from nearly 92,000 borrowers.

The Borrower Protection Program is among several programs that the Biden administration is aiming to overhaul as it seeks to reverse Trump-era policies. Former education minister Betsy DeVos has issued new rules designed to reduce the amount of forgiveness loans she says has become too easy to obtain.

DeVos also implemented a new formula that offered only partial credit compensation, even if the claims were met. Cardona canceled this formula in March and said that all borrowers who received assistance would cancel their loans in full. The department held a hearing on this topic last month as it is considering changing the rules.

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