President Joe Biden on Tuesday announced the forgiveness of $130 million in student debt for 7,400 borrowers who attended the now-defunct CollegeAmerica, a for-profit college in Colorado.
What Happened: The debt relief, which will be automatically applied to students who were enrolled at CollegeAmerica’s Colorado locations between Jan. 1, 2006, and July 1, 2020, comes in the wake of the college’s closure in 2020 due to allegations of misleading students about their career prospects and loans, CBS News reported.
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The U.S. Department of Education stated that CollegeAmerica’s parent company, the Center for Excellence in Higher Education, had misrepresented its graduates’ salaries and employment rates and private loan terms.
The Biden administration has approved $14.7 billion in debt relief for 1.1 million student loan borrowers “whose colleges took advantage of them or closed abruptly,” Biden said.
Why It Matters: This debt relief announcement is part of the White House’s ongoing efforts to alleviate the burden of student debt, despite legal setbacks.
This move follows the Supreme Court’s decision to invalidate the Biden administration’s plan for broad-based student loan forgiveness, which would have erased up to $20,000 in debt for 40 million borrowers. Loan payments are set to resume in October after a three-year pause.
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