Department of Education Announces Cancellation for defrauded loanees of 16,000. PaydayNow explains the reason

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The federal government will discharge $415 million of student loan debt.

The U.S. Department of Education announced on Wednesday that it would cancel government-funded student loans for 16,000 people who were cheated from DeVry University, along with several for-profit schools that have ceased to be open for commercial.

This is the first time the federal government has decided to cancel student loan debt for students who attended a school still in operation and need Federal financial assistance.

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Key TAKEAWAYS

  • The U.S. Department of Education will cancel $415 million of the federal debt on student loans to 16,000 borrowers cheated by their school.
  • DeVry University, ITT Technical Institute, Westwood College, and Minnesota School of Business/Globe Universities.
  • DeVry University remains open, and its students can receive Federal financial assistance.
  • The borrower’s defense to repayment has been granted around $2 billion.

Student fraud from multiple for-profit Schools to get loans discharged

The borrower defense against repayment program is a federal law protecting students who’ve been misled by their schools or whose schools violated state laws.

On Wednesday this week, The U.S. Department of Education announced it was canceling $415 million of federal student loans for 16,000 students who filed claims under the repayment program’s borrower defense.

From that sum, $71.7 million will be released to 1,800 former students from DeVry University who made false claims to convince students to sign up.

Typically, when colleges for-profit fails, it’s the responsibility of the Education Department to foot the cost of loan cancellation. In this instance, the Federal department will seek to recover its expenses from DeVry and remain in operation. This is how the discharges announced break into:

  • Westwood College: The agency will remove $53.1 million in loans to approximately 1,600 customers. The college made some false claims about the likelihood of students finding work and the potential salary they could earn after completing their studies and even offered to help students find a job within six months or help pay their bills.
  • ITT Technical Institute: The Education Department will discharge $3.1 million in debts for approximately 130 students in the nursing program of ITT. ITT Technical Institute falsely informed students that they would be granted the necessary accreditation to help students find jobs following graduation.
  • Minneapolis School of Business/Globe university The department has approved a discharge of $3 million for the 270 former students involved as part of the program for criminal justice. The education network for profit claimed that its programs were accredited to allow them to apply for employment as an officer in the police force or probation or parole officers. In January, the federal agency issued that it had approved the cancellation of $23 million of loans to 921 students enrolled in the program.
  • Other schools In the past, since the federal agency announced relief under the program to federal loan borrowers who other institutions and institutions defrauded, it has also received claims. The most recent announcement contains $284.5 million in refunds for ex-students at Corinthian Colleges and other for-profit universities.2

If you think that you’re eligible to have your student loan canceled because your school has cheated you, you can make an application on the Federal Student Aid Office website.

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