Attorney General of Colorado Phil Weiser applauded the US Department of Education’s news today that 7,400 students, or defrauded borrowers, who attended CollegeAmerica sites in Colorado between January 1, 2006, and July 1, 2020, will receive $130 million in automatic loan forgiveness.
There won’t be widespread student loan forgiveness, but a small number of individuals will have their existing debt canceled.
The group consists of thousands of defrauded borrowers who attended CollegeAmerica sites in Colorado; CollegeAmerica was a now-defunct for-profit university sponsored by the Center for Excellence in Higher Education (CEHE).
The CEHE was found to have enrolled students via deceptive marketing and a predatory lending plan, among other activities, and the announcement on Tuesday comes after years of legal battles and investigations into the institution.
7,400 students who attended CollegeAmerica campuses in Colorado between January 1, 2006, and July 1, 2020, would collectively be automatically relieved of $130 million in debt. Additionally, the Education Department will return any loan payments that have already been made.
Colorado Attorney General Phil Weiser and Federal Student Aid’s Richard Cordray praised the state-federal cooperation in getting the relief during a conference call with the media. It follows a $6 billion settlement reached by the Education Department, which forgives the loans of hundreds of thousands of defrauded borrowers who were taken advantage of by multiple for-profit or other predatory colleges. Similar state-federal collaborations, which could provide assistance for other defrauded borrowers as well, were soon to be announced, according to officials.
Biden keeps the spotlight on student loan relief victories
The Supreme Court invalidated President Joe Biden’s initial proposal last month, which would have given tens of millions of Americans up to $20,000 in student loan debt relief. The administration is seeking an alternative strategy to accomplish that.
Borrower defense has become a politically significant issue as Biden navigates those hurdles.
When defrauded borrowers who were cheated by their universities had their loans discharged, this is known as the borrower defense to repayment. The procedure is primarily intended to assist former students of for-profit colleges who struggle to find employment and default on their loans at significantly higher rates than their peers at other types of higher education institutions.
In a statement regarding the move on Tuesday, Biden stated that the defrauded borrowers had been “lied to, ripped off, and saddled with mountains of debt.” “While my predecessor looked the other way when colleges defrauded borrowers and students – I promised to take this on directly, and provide borrowers with the relief they need and deserve.”
He emphasized that the CollegeAmerica relief is the most recent illustration of the $14.7 billion in total that the administration has forgiven for borrowers whose universities abused students or abruptly shuttered. Biden also mentioned further loan cancellations that the government has made possible through initiatives like public service loan forgiveness.
Weiser is a leader in the Colorado Department of Law’s dedication to protecting Colorado residents who are recipients of student loans and holding predatory colleges and loan servicers accountable for deceiving and misinforming students. Since 2019, the Department of Law has helped over 23,400 Coloradans get over $320 million in refunds or debt relief.
As a resource for student loan borrowers across the state, the Colorado Student Loan Servicers Act established a student loan ombudsperson in the attorney general’s office. The ombudsperson is in charge of taking student loan borrowers’ complaints (especially defrauded borrowers), investigating them, and making an effort to find a solution.