*Earlier this week, the Education Department pledged to cancel $1.5 billion in education debt held by former students of the defunct private, for-profit chain Westwood College. The controversial institution closed in 2016.
This gesture is the latest effort to help students who were defrauded by schools. A statement by the department’s Under Secretary James Kvaal stated that Westwood College operated on a culture of false promises, lies, and manipulation to profit off student debt that burdened borrowers long after Westwood closed.
The statement also said evidence showed “the school engaged in widespread misrepresentations about the value of its credentials for attendees’ and graduates’ employment prospects.”
Westwood students will not need to file a borrower defense claim because the discharges will happen automatically.
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The institution had campuses in five states and offered online education. In doing that, it deliberately “routinely misled prospective students by grossly misrepresenting that its credentials would benefit their career prospects and earning potential.”
For instance, it promised students employment in their field within six months. Furthermore, the institution inflated what it said graduates were making and placement rates. It also lied to the students that it would pay their bills should they fail to get a job within six months.
To unearth these pieces of information, the department collaborated with Colorado and Illinois, whose attorney generals gathered evidence such as “sworn statements from former students and employees, admissions call recordings, multi-media advertising, and Westwood’s internal communications, policies, and trainings.”
The Obama administration had made it easy for borrowers to claim they were defrauded by students. However, the Trump administration tightened the rules, only for the Biden administration to reverse them. Under the “borrower defense” program, the Biden administration is discharging $34 billion in debt for nearly 1.7 million borrowers.
But some lawmakers argue the plan is not fair to those who have already cleared their student loans or didn’t go to college and doesn’t address the underlying cost of college. They have therefore rejected President Biden’s executive action.
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