Amid constant pressure from progressive lawmakers for widespread student loan debt forgiveness, the Biden administration on Thursday announced a new round of targeted relief – this time for past students of a beauty school that authorities say failed to train students in its cosmetology programs “how to cut hair” in some cases.
The Education Department stripped the Marinello Schools of Beauty, now a closed for-profit college, of federal funding in 2016 because of “pervasive and widespread misconduct.”
The agency announced Thursday that it would cancel the debt via its borrower defense program of students who attended the school from 2009 through its 2016 closure. The forgiveness initiative erases the debt of students who can prove they were defrauded by their schools.
Normally in similar cases, borrowers apply individually for forgiveness, but the Education Department said it took the unusual step of erasing the debt in a group claim, the first time it has done so since 2017. That will mean $238 million in debt relief for 28,000 borrowers, including some who hadn’t yet applied for loan cancellation.
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“Marinello preyed on students who dreamed of careers in the beauty industry, misled them about the quality of their programs and left them buried in unaffordable debt they could not repay,” said Education Secretary Miguel Cardona. “Today’s announcement will streamline access to debt relief for thousands of borrowers caught up in Marinello’s lies.”
The latest round of forgiveness comes at a time when wider student loan debt cancelation is in the news.
Since March 2020, the federal government has frozen the requirement that the nation’s 41 million borrowers pay back their federal student loans. Interest has been set at zero, and collection efforts have been paused. The moratorium had been set to expire in May, but Biden again extended it through Aug. 31.
The Marinello news comes days after media reports in which lawmakers suggested the president was considering more debt forgiveness. And on Thursday, Biden confirmed that but said he would not forgive as much as some Democratic lawmakers have pushed for.
“I’m in the process of taking a hard look at whether or not … there will be additional debt forgiveness, and I’ll have an answer on that in the next couple of weeks,” he said.
Biden has been reluctant to speak about universal student loan cancellation and has instead directed responsibility to Congress. The president had campaigned on forgiving up to $10,000 in student debt per borrower.
At a news conference early Thursday announcing the new cancellation, Education Department Undersecretary James Kvaal said the agency was looking at the widespread loan forgiveness, but in the meantime he said the department was “doing everything we can where we have the authority to act.”
“One thing we found when we got here was that even when borrowers were eligible for loan forgiveness, they often weren’t getting it,” Kvaal said.
The administration has canceled roughly $18.5 billion in student loan debt since Biden took office. And about $2.1 billion of that sum benefited roughly 132,000 people in the borrower defense program.
Under President Donald Trump, the government had rejected tens of thousands of people seeking financial relief who said their colleges misled them. The Education Department was then the subject of a class-action lawsuit that is ongoing.
Roughly 110,000 borrower defense applications are waiting for departmental review, according to the most recent federal data.
The announcement also comes after a coalition of consumer advocate groups sued the Department of Education in connection with its handling of borrower to defense cases.
The lawsuit, which was filed by the National Student Legal Defense…
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