The Department of Education had forgiven $17.2 billion in federal student loans for nearly 975,000 borrowers as of April 30, through a program that allows borrowers to seek relief if they’ve been misled or defrauded by their college, the U.S. Government Accountability Office found in a report released Thursday.
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 on the books for years, but the department received few applications until 2015, when the for-profit chain Corinthian Colleges closed.
In the vast majority of cases cited in the GAO report, ED officials forgave the loans of individual borrowers whose claims of institutional misconduct they deemed credible. But they also approved group discharges for students who attended seven colleges found to have engaged in “widespread and pervasive” deceit.
According to the report, 1 percent of the borrower defense applications were denied.
North Carolina representative Virginia Foxx, the Republican chair of the House Education and the Workforce Committee, who originally requested the GAO report in 2016, cited the findings as further evidence that the Biden administration is trying to foist unpaid student loans on taxpayers.
“When all you’ve got is a hammer, everything looks like a nail,” she said in the statement. “For years, Democrat 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’ve got the numbers to confirm it.”
Persis Yu, deputy executive director of the Student Borrower Protection Center, applauded the Biden administration’s efforts to provide relief to borrowers.
“For decades the U.S. Department of Education allowed predatory schools to line their pockets with federal dollars at students’ expense,” Yu said. “To make these students repay loans based upon fraud and misconduct would be unjust. We are proud of the Biden-Harris administration for finally giving these borrowers the relief they desperately need and have been denied for way too long.”
