The federal government just announced it will wipe the slate clean for student loan borrowers that attended Westwood College.
College corruption has been linked to the student debt crisis. In addition, the federal student loan program is costing taxpayers billions of dollars due to predatory lending practices. It was recently determined that Westwood College exaggerated job prospects in order to falsely encourage students to enroll, and various young adults took out massive federal loans in order to pay for these programs. To remedy the situation, the Biden Administration has agreed to cancel $1.5 billion in federal student loans for those who attended the school.
So how long did Westwood College scam students, and what is the current status of the federal student loan program? Students who attended the school between January of 2002 and November of 2015 were misled by the now-defunct institution. A federal investigation revealed that the university “grossly inflated” graduate employment rates and earnings. This went on for years before the school finally closed in 2016 and these types of schemes are not uncommon.
Rutgers Business School has been accused of going so far as to create fake jobs to boost graduate success rates. This is supposed to increase school rankings and draw in more applicants. A whistleblower brought information regarding the situation forward and a lawsuit has been filed. Unfortunately, the federal government has set a precedent that allows school officials to move on without extensive punishment for scamming students through fraudulent practices like those executed at Westwood college.
Other colleges have been investigated for inflating rankings, and additional malicious activity. To make matters worse, the federal student loan program itself was designed to make money for the United States government and instead has put the nation further in debt. This is due to improper oversight and similarly predatory behavior which led a government-backed program to drive American young adults into massive debt without properly disclosing the financial insecurity of the situation. So it’s no wonder that those running the federal government itself are quick to fix the situation in order to avoid scandal and civil unrest regarding the corrupted system.
While many who support the measure claim that $14 billion in student debt has been erased the fact of the matter is that the cost of these loans has now been transferred onto taxpayers. So instead of punishing former Westwood College employees, or taking responsibility for the federal government’s role in creating the student debt crisis, American lawmakers are once again pushing the burden onto the common people. This might spell trouble for an already failing economy, where the long-term effects of this federal debt transfer will be felt for generations.
Students suffering the truth of the Westwood College failures have financially struggled due to the institution’s fraudulent marketing ploys, and predatory lending practices within the federal student loan program. While the program itself is still running, this college is not and the students involved have their debt canceled. This elimination transfers the debt onto the working class. Whether this solution solves the entire student loan crisis is unlikely, but offers momentary relief for those involved.