The Department of Education has forgiven $17.2 billion in federal student loans for almost 975,000 borrowers as of April 30, through a program that allows borrowers to seek relief if they have been misled or defrauded by their college, as found in a report released on Thursday by the U.S. Government Accountability Office.
Under the borrower defense to repayment policy, students can apply for loan relief if they attended an institution that engaged in certain kinds of misconduct, such as misrepresenting graduates’ job and income prospects. The program has been in place for years, but the department received few applications until 2015, when the for-profit chain Corinthian Colleges closed.
In the majority of cases cited in the GAO report, Department of Education officials forgave the loans of individual borrowers whose claims of institutional misconduct they deemed credible. They also approved group discharges for students who attended seven colleges found to have engaged in “widespread and pervasive” deceit.
According to the report, only 1 percent of the borrower defense applications were denied.
Virginia Foxx, a North Carolina representative and the Republican chair of the House Education and the Workforce Committee, who originally requested the GAO report in 2016, referred to the findings as further evidence that the Biden administration is attempting to burden taxpayers with unpaid student loans.
“When all you have is a hammer, everything looks like a nail,” she said in a statement. “For years, Democratic administrations have used illegal interpretations of the borrower defense law and other student loan schemes as tools to give the far left what it wants. Now, we have the numbers to confirm it.”
Persis Yu, deputy executive director of the Student Borrower Protection Center, praised the Biden administration’s efforts to provide relief to borrowers.
“For decades, the U.S. Department of Education allowed predatory schools to profit from federal dollars at the expense of students,” Yu said. “Requiring these students to repay loans based on fraud and misconduct would be unfair. We commend the Biden-Harris administration for finally giving these borrowers the relief they urgently need and have been denied for far too long.”