Biden Administration Cancels $415 Million for Defrauded DeVry University Students

The government is canceling millions in federal student loans for defrauded borrowers who attended DeVry University and other for-profit schools.

By , Attorney

On February 16, 2022, the U.S. Department of Education announced it would provide $415 million of student loan relief in borrower defense to repayment discharges (sometimes called a "borrower defense" discharge for short) for around 16,000 borrowers who attended DeVry University. The Education Department says DeVry violated the law by making widespread substantial misrepresentations about job placement rates. The school repeatedly (and falsely) told students that 90% of DeVry graduates seeking employment following graduation found a job in their field of study within six months after graduating. The actual job placement rate was approximately 58%.

In addition, around $344 million of borrower defense claims will be approved against the following schools based on new evidence that these schools violated the law:

  • Westwood College, which made misleading representations about salary and job prospects to students
  • ITT Technical Institute, which made misleading statements about the accreditation of its nursing program to prospective students, and
  • Minnesota School of Business/Globe University, which made misleading representations to students about their job prospects if they attended the schools' criminal justice programs.

Students who attended certain schools, like Corinthian Colleges and Marinello Schools of Beauty, whose borrower defense applications were reviewed after previous relief announcements, will also get loan relief.

How to Get Student Loan Relief Under This Announcement

You should receive an email notification from the Education Department in the next few weeks if the Education Department's findings affect your borrower defense claim. To get updates, visit the Department of Education's Borrower Defense Updates website.

If you went to any of these schools and haven't submitted a borrower defense application, you may apply here if you think your school defrauded you.

Student Loan Cancellation Under the Biden Administration

President Biden has canceled billions of dollars in federal student loan debt. In addition to the student loan relief discussed in this article, the Biden administration has:

  • canceled $1 billion of student loans for 72,000 student loan borrowers who attended Corinthian Colleges and ITT Technical Institute and previously had part of their federal student loans canceled under a borrower defense claim
  • canceled $1.3 billion of student loans for 41,000 borrowers whose federal student loans were forgiven due to total and permanent disability and then reinstated
  • granted student loan relief for 1 million student loan borrowers who defaulted on Federal Family Education Loans (FFELs)
  • canceled $500 million of student loan debt under the borrower defense rule for 18,000 student loan borrowers who attended ITT Technical Institute
  • canceled $55.6 million of student loan debt under the borrower defense rule for 1,800 defrauded borrowers who attended Westwood College, Marinello Schools of Beauty, or the Court Reporting Institute
  • automatically discharged the student loan debt of more than 323,000 borrowers with total and permanent disabilities, and
  • canceled $1.1 billion in federal student loans for around 115,000 defrauded borrowers who attended ITT Technical Institute.

Also, the American Rescue Plan Act exempts student debt forgiveness from federal taxation until January 1, 2026, and covers Direct Loans, FFELs, and private student loans.

All of this debt relief is in addition to pausing student loan payments, lowering interest rates to 0%, and stopping all collections of student loans in default from March 2020 to May 1, 2022.

Effective date: February 16, 2022