Ed. Dept. Cancels More Debt for Defrauded Students as White House Ponders Widespread Cancellation

The Department of Education yesterday announced it was canceling $238 million in unpaid student loans for 28,000 former beauty school students who were taken advantage of, while at the same time published reports indicate that President Biden is considering a broader cancelation of student loan debt. The office in charge of overseeing federal student loans also announced a series of new hires in its enforcement division, including a litigator from the Consumer Financial Protection Bureau.

The 28,000 students attended the Marinello School of Beauty between 2009 and when it closed in 2016. After an investigation found the school “engaged in pervasive and widespread misconduct that negatively affected all borrowers who enrolled” there, it opted to forgive the debts under the Borrower Defense to Repayment program, which protects individuals who were defrauded by their schools. The Biden administration has used the Borrower Defense program to cancel more than $2 billion in student loans in the past 16 months.

The Office of Federal Student Aid also announced the hiring of four employees for its enforcement unit. Dawn Bilodeau will be senior advisor for policies and oversight, Christopher Madalo will be director of investigations, Brad Middleton will be senior advisor for strategy, and Nina Schichor will be the director of borrower defense.

Earlier this week, a published report highlighted the details of a meeting held at the White House between President Biden and members of the Congressional Hispanic Caucus, in which President Biden reportedly said that he is open to forgiving the debts of students regardless of whether they attended a public or private institution. Press Secretary Jen Psaki said this week that the administration is looking to make an announcement about student loan debt forgiveness before the moratorium on student loan payments ends on August 31.

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