DeVos forgives 1,500 student loans amid federal lawsuit

Education Secretary Betsy DeVos said Friday that she would forgive the loans of more than 1,500 students who attended two for-profit colleges that closed last year.

Students who attended the Art Institute of Colorado and the Illinois Institute of Art between Jan. 20, 2018 and the end of the year will have their loans canceled, while students who went to 24 other schools owned by the same company — the Dream Center — can have their loans canceled if they enrolled after June 29, 2018, DeVos said, according to the Associated Press.

{mosads}The Dream Center shut down last year, one of a series of for-profit institutions that have closed down in recent years.

The report comes as the Education Department faces a federal lawsuit alleging the agency illegally released federal student aid to the struggling schools, despite that they had both lost their accreditation status, according to the AP. Losing this approval should have made them unable to receive funding, but the suit claims the schools were able to stay open and hide from students the fact that they were struggling.

The department said Friday that the accrediting group is to blame for the incident, saying it gave the schools a “newly developed and improperly defined accreditation status.”

“The department is committed to holding institutions and accreditors accountable to the students they serve,” DeVos told the AP in a statement. “In this instance, students were failed and deserve to be made whole.”

DeVos is also facing a lawsuit from students of former Dream Center schools who are demanding loan forgiveness, the AP reports.

DeVos has faced heightened scrutiny and backlash over her handling of a student loan forgiveness program. Under her leadership, the department tightened eligibility rules and stopped processing claims from students who said they were defrauded by their schools, the AP reports.