Students defrauded by for-profit colleges to get millions in loan repayments

The impacted institutions include DeVry University, which has 40 locations in 18 states, including Pennsylvania

By: - February 17, 2022 11:42 am

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WASHINGTON — The U.S. Department of Education announced Wednesday that nearly 16,000 student borrowers would receive millions in loan repayments, after the department found that four private for-profit institutions made misleading claims about their job placement rates.

“The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” U.S. Secretary of Education Miguel Cardona said in a statement.

“Students count on their colleges to be truthful. Unfortunately, today’s findings show too many instances in which students were misled into loans at institutions or programs that could not deliver what they’d promised.”

Cardona said this was part of the Department of Education’s targeted borrower defense policy, which provides relief to students who are found to have been defrauded.

The four institutions include DeVry University, which is based in Illinois, but has 40 locations in 18 states; Westwood College, based in Colorado, which closed in 2016; ITT Nursing, based in Indiana, which filed for bankruptcy in 2016; and the Minnesota School of Business/Globe University, which closed in 2017.

“Today marks the first findings against a school, DeVry University, that is open and still enrolling new students,” Federal Student Aid Chief Operating Officer Richard Cordray, representing the department, said during a call with reporters.

Cordray said that students who attended DeVry University from 2008 to 2015 can file claims to the department. DeVry asserted that 90% of its students who graduated found employment, when the job placement rate was really about 58%.

The department will approve $71.1 million in borrower defense charges for about 1,800 former DeVry students.

“In this case, we reviewed considerable evidence showing that DeVry substantially misstated its job placement rates, and the likelihood of students finding new jobs in their field of study after graduation,” he said.

Officials at DeVry could not be reached for comment.

Cordray said that from 2007 to 2016, officials from ITT Technical Institute lied to students seeking to enroll in its associate nursing degree program.

“The program was not accredited,” he said. “And students were unable to get the benefit they were promised from their courses (of) study.”

The department plans to approve about $3 million to 130 students. This is the fourth time the department has issued discharges to students who attended that institution, for a combined $660 million in discharges for about 23,000 students who attended ITT Tech during those years.

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Ariana Figueroa
Ariana Figueroa

Ariana covers the nation's capital for States Newsroom. Her areas of coverage include politics and policy, lobbying, elections and campaign finance.

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