Student Loans: Westwood College Is Discharging Its Loans To 79,000 Students
According to the Education Department, the defunct institution exploited students and abused the federal financial aid system in order to make a profit.
The U.S. Department of Education announced Tuesday that it is discharging the loans taken out by 79,000 students who attended Westwood College.
For-profit Westwood College and it’s parent company Alta Colleges Inc. first settled fraud charges against them in 2009.
Westwood has officially closed its doors as of the end of 2016. As of the end of 2016, Westwood has officially closed its doors.
Prior to Tuesday’s announcement, the department had already approved the discharge of $130 million in debts for approximately 4,000 ex-students.
Student Loans: Westwood College Is Discharging Its Loans To 79,000 Students
In a statement, the department said that the latest discharges came as a result of findings made by the department in the last two years, including that Westwood “routinely misled prospective students by grossly misrepresenting that its credentials would enhance their career prospects and earnings potential,” the department explained.
The department said Westwood, which operated in five states, falsely promised prospective students that they would be employed in their field of study “within six months after graduation,” and that a Westwood degree would make them “employable for the rest of their lives.”
When the department faced an unknown number of applications for loan discharges under the federal borrower-defense rule, which states students can seek debt forgiveness if they believe they were defrauded by their school, it concluded that anyone who had taken out a loan for Westwood College had a full right to receive the discharge.
A statement released by James Kvaal, the undersecretary of education, referring to two other now-defunct for-profit schools accused of fraud, stated that Westwood College has exploited students and abused federal financial aid in a manner that places it in the same circle of infamy as Corinthian Colleges and ITT Technical Institute.
It seems that Westwood operated on a culture of false promises, lies, and manipulation in order to profit from the student debt that burdened borrowers long after Westwood closed its doors.”
As a result of the new Westwood-related discharges, the total amount is $1.5 billion.
Former Westwood President George Burnett was named president of the University of Phoenix earlier this year, but he left that position within a short period of time after questions were raised about his involvement at the University of Phoenix.
A total of $14.5 billion in discharges has now been approved for nearly 1.1 million borrowers whose colleges took advantage of them, according to the Department of Education. A top priority for the Biden administration has been the discharge of debts owed by students who attended for-profit colleges accused of fraud.
As of the beginning of this month, a total of $3.9 billion in student debt has been canceled for students who attended ITT Tech.
There is no doubt that this news follows the announcement last week that President Biden announced that his administration would be launching a student debt forgiveness program that would cancel $10,000 to $20,000 of student loans across the country.