Education Department cancels $415M in student debt, citing for-profit college fraud

The Education Department is canceling an additional $415 million in federal student loan debt for 16,000 borrowers who attended for-profit colleges and say they were defrauded by the institutions.

Wednesday’s decision was part of an ongoing effort by President Biden to clear a backlog of claims under a borrower-defense program that lets students seek relief after colleges make misleading claims over the rate of students finding jobs in their field of study.

“The department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” Education Secretary Miguel Cardona said.

The debt-relief program was streamlined during the Obama administration but was delayed by Education Secretary Betsy DeVos in the Trump administration. She called it bad policy without sufficient guardrails.

Mr. Cardona said all told, the government has canceled about $2 billion in debt for more than 107,000 people.

The Biden administration, for the first time, granted relief to students from DeVry University in the most recent round. The administration said the college asserted 90% of its graduates found jobs in their fields of study within six months when the true rate was around 58%.

A DeVry spokeswoman told CNN “the Department of Education mischaracterizes DeVry’s calculation and disclosure of graduate outcomes in certain advertising, and we do not agree with the conclusions they have reached.”