Biden Admin Cancels $1.5B in Debt for Westwood College Students

The Department of Education will erase federal student loan debt for 79,000 former students of the shuttered for-profit college.
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  • Former Westwood College students with outstanding federal student loans don't have to take further action to have their debt erased.
  • The Department of Education already discharged $130 million in federal loans through borrower defense claims made by approximately 4,000 former Westwood students.
  • The department decided to cancel debt of all former Westwood College students after investigations into their outstanding borrower defense claims.

The Department of Education (ED) today approved another blanket student loan debt discharge, this time for former students of Westwood College.

ED announced Tuesday that it will discharge the remaining federal student loans for approximately 79,000 former students of the for-profit college — some $1.5 billion in debt. All borrowers with outstanding debt who attended any of the school's campuses or online courses between Jan. 1, 2002 and Nov. 17, 2015 will be eligible for a full student loan discharge.

Westwood College stopped enrolling students in late 2015 and shuttered in 2016.

Borrowers will not be required to take any additional action to have their debt erased. According to a statement from ED, the department already discharged $130 million in federal loan debt through borrower defense claims made by approximately 4,000 former Westwood students.

Findings from investigations into those borrower defense claims prompted the blanket forgiveness, ED officials said.

"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," Under Secretary James Kvaal said in a statement.

Westwood's misdeeds, according to ED, include overpromising on post-graduation job prospects. The school inflated its graduates' salary outcomes and misrepresented national earnings data of college graduates to look as if it were data for Westwood graduates, according to ED.

Likewise, criminal justice programs at Westwood's Illinois outposts promised students they could expect jobs with Illinois law enforcement agencies after graduating. However, Westwood never had the regional accreditation necessary to meet state employment requirements while open, according to ED.

Westwood College joins the likes of other for-profit college systems whose former students are now eligible for complete debt cancellation. ED canceled $5.8 billion in federal student loan debt belonging to former Corinthian Colleges students last June and $3.9 billion in federal student loan debt for former ITT Technical Institute students earlier this month.

"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," Kvaal said.

Sen. Dick Durbin, a Democrat representing Illinois, applauded ED's move to cancel Westwood College student debt.

"After almost 10 years of urging multiple administrations to discharge these borrower defense claims, I am grateful that [ED] is finally relieving these students of the financial burden put on them by the predatory, for-profit Westwood College," Durbin said in a statement. "With [Illinois] Attorney General Kwame Raoul's continued advocacy, Illinois student borrowers are getting the relief they are entitled to after being conned into a fraudulent degree program."

ED credited the attorneys general of Illinois and Colorado for helping the department uncover Westwood's alleged misdeeds.

A recent class action lawsuit settlement would also erase more than $6 billion in debt for former students who filed borrower defense claims against 155 colleges and universities, many for-profit institutions. That settlement has yet to be formally approved.

Including the Westwood College announcement, ED has now approved $14.5 billion in debt discharges for nearly 1.1 million borrowers through borrower defense claims, according to the department.