The U.S. Department of Education announced Tuesday it is discharging the loans taken out by 79,000 students who attended Westwood College.
The for-profit Westwood and its parent company Alta Colleges Inc. first settled fraud charges in 2009. In 2016, Westwood officially shut down. The department had already approved $130 million in debt discharges for approximately 4,000 former students prior to Tuesday's announcement.
The latest discharges stem from findings by the department in the last two years, including that Westwood "routinely misled prospective students by grossly misrepresenting that its credentials would benefit their career prospects and earning potential," the department said.
Westwood, which operated in five states, falsely promised prospective students that they would be employed in their field "within six months after graduation and that a Westwood degree would make them 'employable for the rest of [their lives],'" the department said.
Faced with 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, the department concluded that anyone with a loan taken out to attend Westwood College was entitled to a full discharge.
“Westwood College’s exploitation of students and abuse of federal financial aid place it in the same circle of infamy occupied by Corinthian Colleges and ITT Technical Institute,” said James Kvaal, the undersecretary of education, in a statement referring to two other now-defunct for-profit schools accused of fraud. “Westwood operated on a culture of false promises, lies, and manipulation in order to profit off student debt that burdened borrowers long after Westwood closed."
The new Westwood-related discharges total $1.5 billion.
Earlier this year, former Westwood President George Burnett was named president of the University of Phoenix, but left that position soon after as the department raised questions about his involvement at Westwood.
A total of $14.5 billion in discharges have now been approved for nearly 1.1 million borrowers whose colleges took advantage of them, the department said. Discharging debt for students who attended for-profit colleges accused of fraud has been a top priority for the Biden administration. Earlier this month, a total of $3.9 billion in student debt was canceled for students who had attended ITT Tech.
The news follows President Biden’s announcement last week that his administration launched a student debt forgiveness program that would cancel $10,000 to $20,000 of loans for students nationwide.
