In a major development, President Biden revealed plans to forgive $130 million in student debt for 7,400 borrowers who were former attendees of the now-closed for-profit college, College America, located in Colorado.
$130 Million Student Debt Forgiveness
On Tuesday, President Biden announced the forgiveness of $130 million in student debt for 7,400 borrowers who had enrolled at College America, a defunct for-profit college in Colorado. The college shut down in 2020 after deceiving students about their career prospects and loans.
According to CBS News, students who attended CollegeAmerica’s Colorado facilities between January 1, 2006, and July 1, 2020, will receive debt relief of $130 million. The automatic forgiveness will be used, and it follows the college’s closure in 2020 over claims of deceptive practices regarding students’ job prospects and debts.
The US Department of Education found that CollegeAmerica’s parent company, the Center for Excellence in Higher Education, misrepresented its alumni’s incomes, employment rates, and private loan terms. In response, the Biden administration approved $14.7 billion in debt relief for 1.1 million student loan borrowers who were taken advantage of by their universities or experienced abrupt closures. President Biden views this program as crucial in supporting those impacted by such events.
What Is the Importance of This?
The White House’s commitment to easing the burden of student debt continues with the announcement of this debt relief initiative, even in the face of legal challenges. This action comes in response to the Supreme Court’s ruling, which struck down the Biden administration’s proposal for broad-based student loan forgiveness, intending to wipe out up to $20,000 in debt for 40 million borrowers.
After a three-year suspension, loan payments are scheduled to resume in October. Despite setbacks, the administration remains dedicated to tackling the student debt crisis.