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Students misled by DeVry for profit get loan relief

Wednesday's announcement by the Biden administration that it would cancel student loans totaling more than $70,000,000 for borrowers who claim they were defrauded at DeVry University was the first time that the Education Department had approved such claims for an institution still in operation was made Wednesday.

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Students misled by DeVry for profit get loan relief

After the department found that DeVry lied about its graduates' success in order to attract new students, at least 1,800 former students will have their loans cleared. According to the agency, the school will be required to pay $71.7 million in loan repayments. This was part of a larger installment of $415 millions in loan relief for former students at for-profit colleges.

Miguel Cardona, Education Secretary, stated that students can trust colleges to be honest. "Unfortunately, today's findings reveal too many instances where students were misled into taking loans at institutions and programs that couldn't deliver what they promised."

Donna Shaults, spokesperson for DeVry, stated that the allegations go back to before the school's current leadership and board. While the company was sold in 2018, the allegations by Biden's administration include a period ending in 2015.

Shaults stated in a statement that "Nevertheless, we believe that DeVry mischaracterizes DeVry’s calculation and disclosure of Graduate Outcomes in certain advertising. We do not agree with their conclusions."

The Education Department moved to forgo $344 million in loans for students of ITT Tech and Westwood Colleges, Corinthian Colleges, and other for-profit colleges.

This is another step in the administration’s efforts to clear the backlog of claims under the borrower defence program. Students who have been defrauded or their colleges are eligible for forgiveness of debt.

Although the program has helped to cancel more than 107,000 borrowers' $2 billion debt, it has not provided relief for students until after colleges closed -- leaving taxpayers responsible for loan discharges. The Education Department stated that it would take financial responsibility for DeVry in the coming weeks.

James Kvaal, the undersecretary for Education Department, stated that while students relief is important, he also wants to prevent wrongdoing and protect taxpayers during a media conference.

The agency claims that DeVry falsely claimed success for its graduates between 2008 and 2015.

It claimed that 90% of its graduates were employed within six months of graduating. The school was the focus of a national advertisement campaign that featured the slogan "We Major In Careers."

The Education Department claims that the actual job placement rate was 58%. The agency stated that more than half of the jobs in the school's list were held by students who graduated before the figure was calculated or before they enrolled. DeVry senior executives knew of the problems but used it for many years, according to the agency.

Similar claims by the Federal Trade Commission led in 2016 to a settlement of $100 million with DeVry.

Around 1,800 borrowers have been identified by the Education Department as being eligible for loan discharges. They rely on DeVry’s exaggerated claim when they enroll. As the agency continues to examine claims, this number will likely rise.

The department will also forgive student loans for 1,600 Westwood College borrowers. Westwood College had 15 campuses before it closed down in 2015. The agency also found that Westwood College misled students about their chances of getting a job and good wages after graduation.

In the latest round approvals, $3 million will be repaid to 130 students of ITT Technical Institute. According to the department, the company claimed that its nursing program was accredited in the 10 years prior to it closing. The school was repeatedly denied accreditation, which is a crucial step in helping graduates find jobs.


 

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