In a recent announcement, U.S. Secretary of Education Miguel Cardona revealed a significant student debt relief package. This package automatically forgives loans for 73,600 borrowers who attended schools under the Center for Excellence in Higher Education (CEHE) from 2006 until 2021. CEHE, which included institutions like CollegeAmerica and Independence University, had a troubled history marked by misleading practices.
The schools operated both on-campus and online but were accused of aggressive recruitment and poor-quality education. Legal actions revealed that the schools often made false claims about student salaries and job prospects. A court found CollegeAmerica guilty of multiple consumer protection violations, leading to the suspension of its accreditation and federal aid.
This recent debt relief totals about $1.15 billion. Secretary Cardona emphasized that these measures are meant to assist students harmed by the schools’ misconduct. Besides the CEHE relief, the Department announced additional forgiveness for other institutions like the Drake College of Business and Lincoln Technical Institute in Massachusetts.
These efforts are part of a broader initiative aimed at making higher education more accessible and less burdensome for students. In his statement, President Biden expressed pride in forgiving more student debt than any previous administration.
Today’s actions represent final decisions that can’t be overturned by future administrations. This stance is particularly relevant in light of past actions by former Education Secretary Betsy DeVos, who rolled back protections for students.
Interestingly, the founder of CEHE, Carl Barney, has been active in political donations, notably to former President Trump. This connection has led to speculation about potential shifts in policy should Trump return to office.
Despite the closing of its institutions, CEHE still faces legal troubles. The U.S. Justice Department is pursuing fraud charges tied to the school’s practices, while the Consumer Financial Protection Bureau investigates its loan activities.
Furthermore, CEHE has attempted to collect on high-interest loans from students, even after facing public scrutiny and legal challenges. Former CEO Eric Juhlin has publicly criticized government actions against CEHE, presenting the school as a victim of political conspiracies.
In addition to the CEHE relief, the Department granted debt forgiveness for other fraudulent practices. Drake College of Business, which closed in 2015, misled students about loan stipends and job placements, leading to $107 million in debt relief for around 11,000 borrowers. Similarly, Lincoln Technical Institute faced scrutiny for misleading students regarding job placement rates.
These measures reflect a growing trend to address the harms caused by predatory educational practices, ensuring that students receive fair treatment and support.
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