$238 million in student loans canceled for 28,000 borrowers due to academic ‘misconduct’
(NEXSTAR) – About 28,000 borrowers will have their loans forgiven after a slew of beauty schools were found to have “damaged” them and failed to teach them key skills for the trade, the Department of Health announced Thursday. ‘Education. Borrowers will no longer be responsible for paying $238 million in student loans as a whole, which represents approximately $8,500 in relief per borrower.
According to the Department of Education, borrowers who attended Marinello Beauty Schools between 2009 and its closure in February 2016 are included in the latest action. During those seven years, the school is accused of harming those borrowers with “widespread and widespread misconduct.”
“Marinello preyed on students who dreamed of a career in the beauty industry, misled them about the quality of their programs, and left them buried in unaffordable debt they couldn’t repay,” said said US Secretary of Education Miguel Cardona in a press release. “Today’s announcement will simplify access to debt relief for thousands of borrowers caught up in Marinello’s lies.”
Borrowers who were misled by their school or who attended a school that was at fault may be eligible for the “borrower defense for loan repayment,” says the federal office of student aid. If approved, a borrower may have some or all of their federal student loan debt forgiven, meaning they no longer need to make payments on it. This only covers direct government loans.
The Department of Education on Thursday said it had approved about 300 Marinello-related defense requests after it discovered last summer that schools had made “false claims about the education that would be offered on its campuses across the country. “. Marinello students were not properly trained in “key elements of a cosmetology program,” the department found, including how to cut their hair. At times Marinello also left students without instructors for weeks or months.
Due to Marinello’s misconduct, former students had difficulty passing state licensing tests. Class-action lawsuits have already been filed against Marinello in Nevada and California, accusing the school of using salons as profit centers and students as unpaid workers.
The group loan release will include those who have not yet requested a borrower defense release, according to the Department of Education. It is the first group released for defrauded borrowers under the Biden administration and the first since 2017.
Students who attended Marinello between 2009 and 2016 will soon be notified of their exit approvals, the Education Department announced Thursday. Borrowers will not need to take any additional steps to receive their receipts.
Since Biden took office, a total of $2.1 billion in student loan relief has been approved for 132,000 defrauded borrowers.
Among those are about 1,800 former DeVry University students who received aid after the Education Department discovered that the institution “made numerous false claims about its placement rates.” Another 25,900 borrowers are receiving Borrower Defense discharges due to findings related to five other institutions, including Marinello.