Education Dept. to Cancel $415 Million in Loans for Students of DeVry, Other Schools Who Say They Were Misled

The U.S. Department of Education has discharged $415 million in student loans for select borrowers who attended for-profit schools, CBS News reports.

The agency announced the move Wednesday, saying it has approved borrower defense claims for roughly 16,000 individuals who claimed to have been scammed and misled by a handful of institutions that include DeVry University, Westwood College Employment Prospects, ITT Nursing, and Minnesota School of Business/Globe University.

According to the Education Department, officials found that between 2008 and 2015, DeVry misled prospective students by claiming 90 percent of its graduates had secured jobs in their fields within six months of graduation. However, the department determined job placement among DeVry graduates was around 58 percent. Government officials allege that 90 percent figure was deceitful, as it included graduates who had landed employment prior to receiving their degrees or before enrolling at DeVry. 

Westwood College was hit with similar allegations about post-graduate employment. Former students claimed the school had touted a job placement rate at 80 percent or higher. The school also allegedly promised to help alumni pay their bills if they failed to secure a job within six months of graduating. The Education Department said it found no evidence that Westwood fulfilled this pledge.

ITT is accused of falsely telling prospective students it had or would shortly obtain accreditation required for its nursing program. The school reportedly spent years trying to obtain programmatic accreditation, but failed to do so because it didn’t meet accreditors’ standards. Without accreditation, those who graduated from ITT’s nursing program found it difficult to land nursing jobs. 

Minnesota School of Business/Globe University was also found to have misled students about accreditation. The school allegedly told borrowers its criminal justice programs would allow them to become a police officer or parole/probation officer. However, the Education Department reported that the programs didn’t have the required certifications or accreditation to make the promises possible.

“The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” U.S. Secretary of Education Miguel Cardona said in a statement. “Students count on their colleges to be truthful. Unfortunately, today’s findings show too many instances in which students were misled into loans at institutions or programs that could not deliver what they’d promised.”

Under Cardona, the department has reportedly canceled about $2 billion in student loan debt for more than 107,000 borrowers.

“When colleges and career schools put their own interests ahead of students, we will not look the other way,” said Federal Student Aid Chief Operating Officer Richard Cordray. “We are grateful to have strong enforcement and oversight partners, such as the Federal Trade Commission and attorneys general in Colorado, Illinois, and New Mexico. These offices provided key evidence that played a significant role in reaching the findings announced today. Moving forward, we intend to expand our collaboration with federal and state partners to serve students.”