The Department of Education is canceling $1.5 billion in loans to Westwood College borrowers
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The U.S. Department of Education announced Tuesday it will forgive all remaining federal student debt for alumni of the now-defunct, for-profit Westwood College, providing $1.5 billion in relief to 79,000 borrowers.
The cancellation applies to students who attended any Westwood College campus, including online programs, from January 1, 2002 to November 17, 2015, when the school suspended enrollment prior to its 2016 closure.
Forgiveness is automatic regardless of whether former students have applied for a discharge in the borrower’s defense, the Education Department said.
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“Westwood College’s exploitation of students and abuse of federal grants places it in the same circle of shame as Corinthian Colleges and the ITT Technical Institute,” Undersecretary James Kvaal said in the announcement. “Westwood fostered a culture of false promises, lies, and manipulation to profit from student debt that plagued borrowers long after Westwood closed.”
The department found that the school routinely misled prospective students by “grossly misrepresenting the value of their credentials,” including inflating placement rates and earning potential.
Additionally, Westwood College provided students with a false “employment promise,” promising to help participants with post-graduation bills if they weren’t hired within six months, the results show.
Higher education expert Mark Kantrowitz told CNBC the latest layoff is “a continuation of the work that the Department of Education has been doing in using existing student loan forgiveness and layoff programs to address injustices.”
According to the press release, the department has now approved $14.5 billion in student loan cancellations for nearly 1.1 million borrowers whose colleges have drawn them.
“The Biden-Harris administration will continue to increase oversight and accountability to protect students and taxpayers from abuse and ensure that executives who cause such harm never again work in institutions that receive federal grants,” Kvaal added.
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