Education Department to cancel $1billion in loan debt for students defrauded by schools

Education Department announced plans Monday to reduce loan debt for students who borrowed federal money to attend colleges that either defrauded them or engaged in financial misconduct.

Officials say about 72,000 people will receive $1 billion in student loan forgiveness, according to The Hill.

"Borrowers deserve a simplified and fair path to relief when they have been harmed by their institution’s misconduct," said Education Secretary Miguel Cardona. "A close review of these claims and the associated evidence showed these borrowers have been harmed and we will grant them a fresh start from their debt."

The department will replace the previous administration's method used to calculate debt relief and make sure borrowers with verified claims against a college receive complete student loan forgiveness.

Department officials said former Education Secretary Betsy DeVos' loan forgiveness program "did not result in an appropriate relief determination" for defrauded borrowers.