$238M worth of student loan debt from students of Marinello beauty schools to be canceled

If you or someone you know were left in the dust when Marinello Schools of Beauty closed all their locations, we've got some good news for you. 

Students of Marinello Schools of Beauty - which closed in 2016 - will have their student loans discharged, the Department of Education announced Thursday.

This applies to all 28,000 borrowers who enrolled in the schools from 2009 to Feb. 2016, totaling about $238 million, officials said.

The discharge will also apply to those who have not yet applied for a borrower defense discharge.

This is the first group discharge for defrauded borrowers to be approved since 2017, according to the department.

To date, the DOE had approved approximately 300 borrower defense claims at Marinello under findings reached last July that Marinello made widespread, substantial misrepresentations about the instruction that would be offered at its campuses across the country. 

The Department found that the schools failed to train students in key elements of a cosmetology program, such as how to cut hair. It also found that Marinello left students without instructors for weeks or months at a time as part of a pattern of failing to provide the education it promised.

As a result, students would have found it extremely difficult to pass necessary state licensing tests and receive the promised return on their educational investment. Class-action lawsuits filed in Nevada and California alleged that the school used salons as profit centers and exploited students as a source of unpaid labor.

According to officials, the Marinello findings stem primarily from the agency’s investigative work that began in 2015 and that resulted in the Department removing the school from the federal student aid programs.

At all times relevant to the findings, Marinello was owned by B&H Education Inc. with campuses in Los Angeles, Burbank, Moreno Valley, Sacramento, and in Las Vegas. Marinello also had campuses in Connecticut, Kansas, Massachusetts, and Utah.

Students who attended Marinello will soo be notified of their approvals for discharge, with discharges following in the months after. Borrowers will not have to take any additional actions to receive their discharges, officials said.