U.S. Education Secretary Betsy DeVos directed her department last month to forgive the federal loans of more than 1,500 borrowers who attended two for-profit colleges that shuttered abruptly last year. The debt cancellation amounts to approximately $11 million in federal funds.
The for-profit Dream Center Education Holdings, which operated the Art Institutes, Argosy University, and South University chains of colleges, collapsed last year, shutting down campuses nationwide. Students who attended these schools were eligible for loan forgiveness only if they enrolled after June 28, 2018. But for students enrolled at the Art Institute of Colorado and the Illinois Institute of Art, a controversy involving their accreditation prompted the U.S. Department of Education to extend the window of eligibility an additional six months. In general, most federal loan discharge programs require the affected student to enroll fewer than 120 days before a school’s unexpected closure.
Former students R.J. Infusino and Keishana Mahone, both from Illinois, stand to receive $7,600 and $3,600, respectively, in debt relief. Infusino enrolled in a Florida-based online course to complete his degree, and Mahone is still considering her options. The average loan amount per affected student is about $7,000.
Critics complain that the window is still too restrictive, leaving thousands of borrowers high and dry.
“For the vast majority of defrauded students, this announcement cancels only a small portion of the loans they took out to attend a failing school,” said Rep. Bobby Scott, D-Va., chairman of the House Education Committee. —L.E.