Biden administration cancels $55.6M in student loan debt for fraud victims

The Biden administration is canceling $55.6 million in student loan debt for victims who were defrauded by three for-profit institutions.

The Education Department said in a Friday statement that it has canceled the debts of 1,800 borrowers who attended Westwood College, Marinello Schools of Beauty and the Court Reporting Institute.

Of the forgiven debt, the lion’s share — some $53 million — will go to borrowers who attended Westwood College, which closed in 2015.

The school, which had campuses across the country, is accused of misrepresenting students’ ability to have credits transferred to other institution between 2002 and 2015. In addition, it is accused of misleading students who went through its criminal justice program into thinking that they would be able to find employment within various law enforcement agencies in Illinois.

Separately, the department approved more than $2.2 million from 200 claimants who say they were defrauded at Marinello. Borrowers claimed the school didn’t teach them key elements of a cosmetology program, and that students were left for weeks or months without instructors.

Another $340,000 in debt was forgiven to 18 borrowers who attended Court Reporting Institute. The agency says the majority of students were never able to complete the program, noting that just 2 percent to 6 percent of students graduated.

The debt is being forgiven under the Education Department’s borrowers defense program, which allows those who have been defrauded by institutions to have their debts expunged.

The Biden administration had already canceled $1.5 billion in debt for nearly 92,000 borrowers who claim they were defrauded by ITT Technical Institute and Corinthian College. 

Education Secretary Miguel Cardona said in a statement that the agency will “continue doing its part to review and approve borrower defense claims quickly and fairly so that borrowers receive the relief that they need and deserve.”

“We also hope these approvals serve as a warning to any institution engaging in similar conduct that this type of misrepresentation is unacceptable,” he said.

The White House is under vocal pressure from the left to cancel wide swaths of student loan debt, something President Biden has so far been hesitant to do.