The Biden administration announced Tuesday it will deliver $130 million in automatic relief to 7,400 students who enrolled in the now defunct, CollegeAmerica between Jan. 1, 2006, and July 1, 2020. 

“These borrowers were lied to, ripped off, and saddled with mountains of debt,” President Joe Biden said in a statement. “While my predecessor looked the other way when colleges defrauded students and borrowers — I promised to take this on directly and provide borrowers with the relief they need and deserve.”

In 2012, the Colorado Attorney General investigated the practices of the Center for Excellence in Higher Education (CEHE), which culminated in a 2017 lawsuit. The state won the case in 2020 and determined that CEHE made widespread misrepresentations about salaries and employment rates of its graduates. The Department said it had reviewed more than 300 trial exhibits, including internal policies, procedures, emails, and the testimony of 40 witnesses, including former students and CEHE officials. 

“This announcement means a clean slate for thousands of students hurt by CollegeAmerica’s widespread misconduct,” said the Department’s Federal Student Aid Chief Operating Officer Richard Cordray. “The close partnership between the Department of Education and Attorney General Weiser’s office made this action possible. We will continue to work to deliver targeted student loan relief to borrowers whose schools take advantage of them.”

The administration has approved $14.7 billion in relief for 1.1 million borrowers “whose colleges took advantage of them or closed abruptly.”

“I applaud the Department of Education for providing much-deserved relief to the many Coloradans who were mistreated by CollegeAmerica,” said Colorado Attorney General Weiser. “CollegeAmerica knowingly took advantage of students by luring them into high-priced, low-quality programs with promises of high-earning potential and job placement that it knew were not attainable. Protecting borrowers from predatory lending and helping Coloradans navigate through student loan burdens will continue to be a priority for our office.”

Earlier this month, the Department of Education announced it would forgive federal student loans to 804,000 borrowers to fix “historical failures in the administration” after the Supreme Court blocked Biden’s loan forgiveness plan. 

The Department will provide relief to borrowers of CollegeAmerica regardless of whether they have filed a borrower defense to repayment application.