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January 13, 2017

The U.S. Department of Education on Friday announced federal student loan discharges for thousands of students who attended several now-shuttered for-profit colleges, including five campuses in Massachusetts.

The Education Department is forgiving the federal student loans of those who attended any of the five American Career Institute (ACI) campuses in Massachusetts.

ACI closed abruptly in 2013 after Massachusetts Attorney General Maura Healey sued the for-profit chain for misleading students about graduation and job placement rates.

"ACI was a predatory for-profit school that admitted to breaking Massachusetts law and lying to students. It promised meaningful vocational training and opportunities, but it failed to deliver," said Healey, adding that this blanket discharge is unprecedented. 

About 4,500 former students will have their loan balances automatically discharged at a cost of more than $30 million.

"The debt nightmare is finally over for 4,500 Massachusetts students who were cheated by this predatory for-profit school," said Democratic U.S. Senator from Massachusetts Elizabeth Warren. 

Warren urged the Obama administration to issue the debt relief and, as the Trump administration moves in, she's pledging to keep fighting for loan cancellations. 

In its announcement Friday, the Department also touted “significant progress” in processing borrower defense claims from students who attended the now-defunct Corinthian Colleges and ITT Technical Institute.

The collapse of ITT Tech left thousands of students in debt and no degree. The Department has required those students to individually apply for loan forgiveness, approving only 6,000.

The move, coming just days before President-elect Donald Trump’s administration takes over, is unusual. The Department said this is the first time it's conducting a "blanket" discharge of this type. 

 It’s unclear whether the Trump administration will continue the student loan forgiveness program. On the campaign trail, president-elect Donald Trump said he wanted to transfer the student loan system back over to private lenders and get the federal government out of the student loan business altogether.

Related: Where Are The 40,000 Students ITT Tech Left Behind When It Closed?

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