His administration has so far focused on targeted actions that have eliminated $32 billion in loans for public service workers, permanently disabled borrowers, defrauded students and people whose schools abruptly closed while they were enrolled. Biden pledged to forgive $10,000 in student debt per borrower - a promise he has not yet fulfilled. Biden to extend the pause again, likely until 2023. Payments are scheduled to restart in September, but loans servicers - who have been told by the government to hold off on sending out bills - expect Mr. Biden faces an imminent decision about whether to extend the federal student loan payment pause that began more than two years ago, in March 2020. “That is not how things worked in the past, and it’s one of the improvements we’re trying to make. “We do think it’s really important for, especially, individual officials and leaders of these schools to take responsibility for the failures of those schools,” said Richard Cordray, the chief operating officer of the Education Department’s Federal Student Aid office.
“Their entire business model relied on driving students deep into debt, and then they laughed their way right to the bank.”īoth ITT and Corinthian went bankrupt years ago, leaving taxpayers on the hook for the debts now being forgiven for the schools’ former students. “In recent years, too many for-profit colleges and career schools have been caught defrauding and deceiving their students,” the education secretary, Miguel A. It is the second time that President Biden’s administration has automatically eliminated the debts of defrauded students, after a similar move in June that forgave nearly $6 billion owed by more than 500,000 former students at Corinthian Colleges, another large for-profit chain that imploded. The agency said that it would automatically discharge all remaining federal loans for 208,000 borrowers who attended ITT Technical Institute schools from 2005 until the chain’s collapse in 2016.
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The moves are part of the department’s efforts to crack down on the for-profit education sector and help students who have been defrauded. In a pair of aggressive moves targeting for-profit college chains, the Education Department on Tuesday wiped out about $4 billion in debts owed by students who attended ITT Technical Institute schools and sought to recoup $24 million from DeVry University.
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