The Education Department on Wednesday agreed to settle about 200,000 borrower defense claims brought in a lawsuit against the department.
The agreement will automatically provide the elimination of student loan debts for those involved. The agreement states that “attendance at one of these schools justifies presumptive relief, for purposes of this settlement, based on strong indicia regarding substantial misconduct by listed schools, whether credibly alleged or in some instances proven, and the high rate of class members with applications related to the listed schools.” The institutions are for-profit colleges and universities, many of which have shut down.
Education Secretary Miguel Cardona issued the following statement regarding the proposed settlement, which still must be approved by a federal judge. “Since day one, the Biden-Harris administration has worked to address longstanding issues relating to the borrower defense process. We are pleased to have worked with plaintiffs to reach an agreement that will deliver billions of dollars of automatic relief to approximately 200,000 borrowers and that we believe will resolve plaintiffs’ claims in a manner that is fair and equitable for all parties,” said Cardona.
But Career Education Colleges and Universities, which represents for-profit colleges and universities, opposes the agreement.
“We are deeply concerned that in its haste to respond to outside political pressure, the U.S. Department of Education is attempting to approve wide swaths of claims without regard to individual merit,” said CECU’s president and CEO, Jason Altmire. “The department has an obligation to take a more measured approach to determine if each student has been financially harmed based on an unlawful act. The court should look carefully at the settlement agreement to ensure it is fair for all parties involved.”