The U.S. Department of Education announced on August 30th that it will cancel all remaining federal loans taken out by the students who attended Westwood College. In total, the loan cancelation will deliver $1.5 billion in relief for 79,000 borrowers. Here’s what you need to know.
Students who attended the for-profit school Westwood College will see their debt canceled for the now-defunct school, per CNBC. The cancelation covers students who attended any of the Westwood College campuses or were enrolled online between Jan. 1, 2002, and Nov. 17, 2015, before the schools closed their doors in 2016.
The cancelation comes after the Department of Education found the school to have routinely misled students by “grossly misrepresenting” the value of the school’s credentials. In addition, the school was found to inflate job placement rates and earning potential following graduation.
The school was also found to have given students a false “employment pledge,” promising to help with post-graduation bills if it took them more than six months to find employment, according to CNBC.
“Westwood College’s exploitation of students and abuse of federal financial aid place it in the same circle of infamy occupied by Corinthian Colleges and ITT Technical Institute,” Under Secretary James Kvaal said in the announcement. “Westwood operated on a culture of false promises, lies, and manipulation in order to profit off student debt that burdened borrowers long after Westwood closed.”
Students who attended the college will see their loan cancelation automatically, the Education Department explained. This will happen regardless of whether students have applied for a borrower defense discharge.
To date, the Department of Education has approved $14.5 billion in student loan cancelation for defrauded students, according to NBC News.
The latest debt forgiveness follows last week’s announcement that borrowers with incomes under $125,000 for an individual or $250,000 for joint filers will receive $10,000 in debt cancelation, or $20,000 if they received a Pell Grant.