Education Department Responds to For-Profit Motion to Intervene
Meghan Brink
July 27, 2022
The Biden administration declared in a response to a legal action from the for-profit industry that it has the authority to automatically cancel $6 billion in federal student debt to over 200,000 borrowers with pending borrower-defense claims as a result of the settlement in Sweet v. Cardona.
In its response, released Tuesday, the department said that it has the authority to cancel the outstanding student debt of borrowers who attended a list of 150 colleges, all for-profit institutions, who said they were defrauded through misleading practices by the colleges.
“The settlement agreement provides for resolution of this lawsuit based on an exercise of the Education Secretary’s considerable discretion under the [Higher Education Act] to compromise and settle claims arising out of the federal student loan programs,” said the response.
The president of Career Education Colleges and Universities, Jason Altmire, did not offer a comment on the response to the Education Department when asked by Inside Higher Ed. CECU, which represents for-profit colleges, helped to coordinate the motions to intervene on the settlement that were filed on behalf of the for-profit sector just two weeks ago.
