Biden administration erases $130 million in student loans for 7,400 borrowers
The White House on Tuesday said it would forgive debt for those who took out loans to attend CollegeAmerica in Colorado, which officials said misled students
The Biden administration on Tuesday forgave $130 million in student debt for 7,400 borrowers who attended CollegeAmerica, a now-defunct institution in Colorado that officials said misled borrowers about their loans and career prospects.
These borrowers "were lied to, ripped off and saddled with mountains of debt," President Joe Biden said in a statement announcing the debt cancellation.
The action impacts students who attended the school's Colorado-based locations between Jan. 1, 2006 and July 1, 2020, the year in which the school closed its campuses, Colorado Attorney General Phil Weiser said. He had petitioned the White House last year to erase CollegeAmerica student debt.
More from Personal Finance:
Is Biden's $39 billion student loan forgiveness action legal?
When student debt payments restart, your loan type will make a big difference
Can employers be a firewall for student loan borrowers?
The U.S. Department of Education found that CollegeAmerica's parent company — the Center for Excellence in Higher Education — "made widespread misrepresentations about the salaries and employment rates of its graduates, the programs it offered and the terms of a private loan product it offered," Weiser said in a statement Tuesday.
Biden's action follows a Supreme Court ruling last month that killed a White House plan to forgive up to $20,000 of student debt per borrower. Loan payments are slated to resume in October after a pause of more than three years.
The White House has approved $14.7 billion in debt relief for 1.1 million student loan borrowers "whose colleges took advantage of them or closed abruptly," like those at CollegeAmerica, Biden said. The relevant institutions include schools like Corinthian Colleges and DeVry University.
Separately, the administration earlier this month announced $39 billion of debt forgiveness for 804,000 borrowers after a review of debtors in income-driven repayment plans.
In total, the administration has approved $116 billion in debt relief for over 3.4 million Americans, Biden said.
This story originally appeared on: CNBC - Author:Greg Iacurci
