Biden Admin Erases $130 Million in Student Debt for 7,400 Colorado College Students

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President Joe Biden expressed his concerns, stating, “These borrowers were lied to, ripped off, and saddled with mountains of debt.”

Biden Admin Erases $130 Million in Student Debt
Biden Admin Erases $130 Million in Student Debt ( Photo: CBS News )

The Biden admin announce that it will be canceling $130 million in federal debt for 7,400 students who attended CollegeAmerica in Colorado

This move marks another instance of the Biden admin forgiving federal loans for individuals who were deceived or underserved by for-profit colleges. To date, the Department of Education has already forgiven $14.7 billion in such debts, benefiting nearly 1.1 million borrowers, including those who attended Corinthian Colleges and ITT Technical Institute, which are now defunct.

The Biden admin debt relief will be automatically applied to Colorado students who attended CollegeAmerica between 2006 and July 1, 2020. This action follows previous efforts to alleviate Biden admin financial burdens for participants in programs like the Public Service Loan Forgiveness and income-driven repayment plans, both of which have been recognized as flawed by the Department of Education.

CollegeAmerica, which operated three locations in Colorado, ceased operations in 2021 after the state successfully sued the institution. The lawsuit, brought by Colorado Attorney General Phil Weiser, revealed that CollegeAmerica knowingly lured students into high-cost, low-quality programs with false promises of lucrative careers and job placements.

CollegeAmerica misrepresented its graduates’ earnings, claiming high salaries when, in reality, the average graduate earned only $25,000 five years after completing their education less than the salaries of high school graduates

The college also falsely advertised job placement rates, stating 70% while the actual rate was 40%, including cases where graduates ended up working in unrelated fields.

The Department of Education also found that CollegeAmerica falsely advertised certain programs, such as claiming to offer EMT certification courses when they did not, and described a financial assistance program as “affordable” despite being unaffordable for many students.

The Center for Excellence in Higher Education, which operated CollegeAmerica, has not issued any comments on the matter. Last year, the Biden admin sued the Department of Education, alleging improper targeting and withholding of funds.

The Biden admin debt relief follows an extensive government investigation, and borrowers will have their federal loans canceled without the need to file a borrower defense to repayment application. Notifications regarding approval for debt cancellation related to CollegeAmerica will be sent out in August, and any remaining loan balances will be cleared, along with credit trade lines, while previous payments made to the Department of Education will be refunded. President Biden emphasized his commitment to holding bad actors accountable and ensuring relief for borrowers during his tenure.

 

READ ALSO: Supreme Court Strikes Down Student Loan Forgiveness Plan, Impending End Of Moratorium Worries Borrowers

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