The group discharge affects 7,400 borrowers who attended Colorado-based campuses of CollegeAmerica
The Department of Education is canceling $130 million in federal student debt for 7,400 borrowers who the agency found were scammed by their school, the Department announced Tuesday.
“Nothing can replace the time these students spent, the years that have passed and their trust that is broken,” Richard Cordray, the chief operating officer of the Office of Federal Student Aid, told reporters Tuesday. But he said the agency will do what it takes “to make things right.” The law has been on the books since the 1990s, but it was rarely used until the mid 2010s when students who had attended shuttered for-profit colleges, organized by activists, began flooding the Department of Education with claims for relief.
As part of its announcement, the Department invited more states to provide any evidence of wrongdoing by schools that they’ve gathered. The latest version of the borrower defense rule, which went into effect earlier this month, provides a specific process states can use to submit group applications for debt discharge.
Between 2006 and 2014, the school also told prospective students it offered certain programs or would prepare them for certain jobs when that wasn’t the case, according to the Department. For example, the company advertised that it could train students to become X-ray technicians even though it didn’t own an X-ray machine, the agency said.
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