Student debt wiped for thousands defrauded by for-profit colleges

The Department of Education said it is forgiving 18,000 loans for borrowers who attended a for-profit college that exaggerated claims about its graduates’ success in finding jobs and closed in 2016 after suffering a series of blows under the Obama administration.

The United States Education Department said on Wednesday it is erasing student debt for thousands of borrowers who attended a for-profit college chain that made exaggerated claims about its graduates’ success in finding jobs. The Biden administration said it is approving 18,000 loan forgiveness claims from former students of ITT Technical Institute, a chain that closed in 2016 after being dealt a series of sanctions by the Obama administration. The new loan discharges will clear more than $500m in debt. The move marks a step forward in the Biden administration’s effort to clear a backlog of claims in the borrower defence program, which provides loan forgiveness to students who were defrauded by their colleges. Claims piled up during the Trump administration, which stalled the program and only started processing claims after a federal court demanded it. There are now more than 100,000 pending claims.