Education Department cancels $415 million in student debt for victims of for-profit college fraud

The Education Department announced on Wednesday that it has canceled another $415 million in federal student loan debt owed by nearly 16,000 borrowers who were misled by for-profit colleges. 

At the of writing, the department has canceled about $2 billion in claims from more than 100,000 borrowers. More may be eligible, but are waiting for their paperwork to be processed.

Under US Education Secretary Miguel Cardona, the department has canceled about $2 billion in borrower defense claims from more than 107,000 individuals to date.

“The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” Cardona said in a statement.

The borrower defense policy allows students who were defrauded by their colleges to seek federal debt relief. Wednesday’s action marked the first time the Education Department approved borrower defense claims associated with an operating institution, being DeVry University. 

The department estimates that approximately 1,800 former DeVry students are eligible for nearly $72 million in discharges. More borrowers could see relief as the department continues reviewing pending applications.

The Education Department found that DeVry University had misled prospective students from 2008 to 2015, falsely claiming that 90% of its graduates had found jobs in their fields of study within six months of graduation, this statistic was a centerpiece of a national advertising campaign. In reality, the institution’s job placement rate was around 58%, according to the Department of Education.

The government will seek to recoup the cost of the student loan discharges from the institution.

DeVry University spokeswoman Donna Shaults said in an emailed statement to CNN that “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.”

She also noted that DeVry has a different board and leadership than it did between 2008 and 2015 and “has oriented our whole organization around helping people compete in a complex and changing labor market.”




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Paul, 37, is from Scotland in the UK, but currently lives and works in Bangkok. Paul has worked in different industries such as telemarketing, retail, hospitality, farming, insurance, and teaching, where he works now. He teaches at an all-girls High School in Bangkok. “It’s a lot of work, but I love my job.” Paul has an active interest in politics. His reason for writing for FBA is to offer people the facts and allow them to make up their own minds. Whilst he believes opinion columns have their place, it is also important that people can have accurate news with no bias.

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