Feds to Forgive Millions in Student Loans for Defrauded Beauty School Students

On April 28, the U.S. Department of Education announced it would offer loan forgiveness to students at the Marinello Schools of Beauty who were burned by the institution. Students who received loans between 2009 and February 2016, when the school eventually closed, will have their debt canceled. The move affects 28,000 borrowers and totals nearly $238 million.

Student loan forgiveness has been a top priority of the Biden administration, which has canceled over $18 billion in student loan debt since the he took office. Since March 2020, the Biden administration has frozen federal student loan payments, a move they just announced will continue through August 2022. This issue has a significant impact on Black college graduates, who stats show are burdened with an average of $25,000 more in student loan debt than white college grads.

The department says the Marinello Schools of Beauty student’s debt will be canceled based on the borrower defense program, which lets students off the hook for federal loans they received, if they can prove they were swindled by their school. In the case of Marinello, a federal investigation found that the schools failed to teach their cosmetology students important parts of the curriculum, like how to cut hair. And when a cosmetology student doesn’t know the proper way to cut hair, it makes it extremely difficult for them to pass the state licensing tests they need to work and repay their loans. And if that wasn’t grimy enough, there were also class-action lawsuits filed in Nevada and California accusing the schools of using students as a source of unpaid labor in salons.

Education Secretary Miguel Cardona said in a statement:

“Marinello preyed on students who dreamed of careers in the beauty industry, misled them about the quality of their programs, and left them buried in unaffordable debt they could not repay. Today’s announcement will streamline access to debt relief for thousands of borrowers caught up in Marinello’s lies.”

Aaron Ament, president of the National Student Legal Defense Network, hopes the Marinello decision is a sign of more much-needed loan forgiveness to come. “The backlog of students who are owed debt relief under borrower defense is long and growing – it’s bigger now than it was under the Trump administration – and this move shows there is no reason the department can’t rule on group claims right now,” he said.