The request was largely rejected by the Trump administration, and so far the Biden administration has remained silent as state attorneys general have continued to press the issue.

But this month, the Department of Education informed the offices of Minnesota Attorney General Keith Ellison and Oregon Attorney General Ellen F. Rosenblum, who both led the bipartisan campaign, that it was considering the demand.

“While we have not yet made a decision on whether to further extend the window for borrowers who attended Dream Center institutions on or after October 17, 2017, we are closely reviewing the circumstances that led to closure of these institutions and will make a decision. soon,” James Kvaal, undersecretary for education, wrote in a March 4 letter to attorneys general.

The letter came days after Ellison announced an agreement, involving 10 states, including Virginia, to cancel $2.1 million in private student loans from Argosy. The university, with campuses stretching from Virginia to California, closed abruptly three years ago amid allegations of fraud. State attorneys general alleged that Dream Center used deceptive and deceptive marketing to trick students into enrolling and taking out institutional loans.

When the deal was made public, Ellison, who led the negotiations, implored Education Secretary Miguel Cardona to reconsider his request for blanket federal debt cancellation. He and other state attorneys general want the department to expand the eligibility period for former students to have their debts forgiven under the federal closed schools exit program.

Borrowers are generally eligible if they were enrolled, on approved leave, or withdrew within four months of their college closing. Corn state prosecutors asked to extend the deadline to October 2017.

Dream Center has struggled to turn declining for-profit colleges into thriving nonprofit schools. Enrollment at the three schools topped 60,000 when the Los Angeles-based nonprofit acquired them, but fell to 9,609 at the time of the closure. Dream Center has spent months trying to sell and close campuses to meet its financial obligations. When it failed, Dream Center in January 2019 went into receivership – a process similar to bankruptcy.

At that time, Dream Center was involved in a controversy for lying to students about the accreditation of several art institutes which have since closed. Students continued to enroll, and the Trump administration continued to give them federal loans, despite schools being ineligible. The deception eventually led the Department of Education to extend the exit window for closed schools until the schools lost their accreditation.

Meanwhile, the department cut federal student loans and grant funds to Argosy after learning in 2019 that school officials had withheld $16 million in financial aid owed to students. Without the critical source of federal student aid revenue, Dream Center closed schools days later.

“While these events were tragic, they were also preventable,” Ellison, Minnesota’s attorney general, said in a statement. “The Department of Education under Betsy DeVos should never have allowed Dream Center to take over Argosy and other schools. Now the least the Department can do is ease the debt burden of students who reasonably withdrew from school as indications of mismanagement came to light.

According to the latest available data from the department, more than 2,600 Argosy students had received a total of $72 million in closed school loan releases as of May 2021.

Pushing back the eligibility window to 2017 could also resolve certain claims for debt relief made under a law known as the borrower’s defense to repayment. Students are entitled to have their federal loans canceled when their college uses illegal and deceptive tactics to persuade them to borrow.

The Biden administration has cleared a backlog of defense requests that built up after the Trump administration refused to process tens of thousands of requests filed by former students of for-profit colleges. Yet thousands of complaints, some dating back years, continue to languish at the Department of Education.

Former art institute students, who were enrolled during the Dream Center’s tenure, have filed nearly 4,800 claims to date, according to court documents. The Ministry of Education has not approved any.

Because some applicants may have graduated or transferred to another college, they would not be eligible for a closed school release, even if the department extends the window. The limits of the discharge make it imperative for the Department of Education to deal with the backlog of defense claims, said Alex Elson, co-founder of the National Student Legal Defense Network.

“Over the past six years, state AGs have submitted numerous borrower defense requests on behalf of large groups of defrauded students from schools across the country, just to gather dust,” Elson said. “The Biden administration should move quickly to grant these requests, which would bring critical and much-needed relief to tens of thousands of students.”