Some student loans at former Schaumburg college forgiven
The Illinois Institute of Art formerly located in Schaumburg is one of two for-profit colleges that shut down last year for which the student loan debt of more than 1,500 borrowers has been forgiven by Education Secretary Betsy DeVos.
Facing a federal lawsuit and mounting criticism, DeVos on Friday said she will forgive certain student loans at both the Schaumburg college and the Art Institute of Colorado.
Students will not have to repay federal loans borrowed from Jan. 20, 2018, through the end of last year, DeVos said, although they will still be responsible for any previous loans. In all, about $11 million will be automatically canceled.
Students who attended 24 other schools owned by the same company will be able to get their loans erased if they enrolled after June 29, 2018. Federal rules typically allow students to get loans erased if their schools close within 120 days after they enroll, but DeVos said she is expanding the window in this case.
It's meant to provide relief to students who took on debt to attend colleges owned by Dream Center Education Holdings, which collapsed last year and shuttered campuses across the nation. But some critics say it doesn't go far enough, and still leaves many students carrying debt from a defunct chain.
A federal lawsuit argues the Education Department failed to cut funding from the Colorado and Illinois schools even after they lost the seal of approval of their accreditor. Losing approval should have made the schools ineligible for funding, the suit says, but instead they were allowed to keep operating without telling students of their troubles.