GENEVA, SWITZERLAND JUNE 16, 2021: US President Joe Biden smiles during talks with Russia … [+]
Mikhail Metzel / TASS
The Biden government announced Wednesday that it would cancel $ 500 million in student loan debt for thousands of student loan borrowers.
The student loan waiver is granted for repayment through the borrower defense program. Established in 2016 with formal rules and procedures under the Obama administration, the program provides student loan forgiveness to students who have been misled, defrauded, or otherwise harmed by predatory colleges and universities – often for-profit schools.
Under former Minister of Education Betsy DeVos, the Department of Education enacted new rules for the Borrower Defense Program, which significantly weakened the facilities available and increased the burden of proof required to enforce them. The ministry also introduced a controversial new policy that partially (rather than fully) waives approved applications.
Under the Biden administration, Education Minister Miguel Cardona changed the policy to “partially facilitate” approved borrower defense applications so that borrowers can receive full student loan waivers and reimbursements for payments already made.
The latest wave of approvals from Borrower Defense will see full cancellation of the federal student loan for 18,000 borrowers at ITT Technical Institutes, a for-profit college chain that collapsed in 2016 after allegations of widespread fraud. These approvals are in addition to the ease of borrower defense announced earlier this year by the Department of Education, which will affect 72,000 additional student loan borrowers who have applied for loan waiver.
“Our action today will give thousands of borrowers the fresh start and the relief they deserve after ITT has lied to them repeatedly,” Secretary of State Cardona said in a statement. “Today’s action is part of the Biden Harris Administration’s continued commitment to advocate for borrowers when their institutions take advantage of them. Many of these borrowers have long waited for relief and we need to make swift decisions for those whose claims are pending. This work also underscores the need for ongoing accountability so that institutions will never again be able to commit this widespread deception. “
According to a statement, the Ministry of Education will begin to inform borrowers of their approval in the coming weeks and then work “swiftly” to cancel the loan balances for these borrowers.
However, student debt relief announced today accounts for a tiny fraction of outstanding student loan debt, and advocates of student loan borrowers continue to urge the administration to take steps to enact broader student loan relief. Last week, advocates urged the administration to automatically cancel student loan debt for 500,000 disabled borrowers and millions of borrowers seeking relief through the Public Service Loan Forgiveness (PSLF) program. Meanwhile, the Biden administration is in the midst of a legal review to determine whether the president has the authority to unilaterally cancel large-scale student loan debt through executive action. The results of this review could be published in the coming months.
further reading
Biden Administration Announces Comprehensive Overhaul of Income-Based Repayment and Allocation Programs for Student Loans
Will Biden cancel the student loan debt? Maybe we will know soon
Biden’s Student Loan Forgiveness Review: Should You Take Steps Now to Relieve Student Debt Later?
New data shows that most who apply for this student loan program are turned down
source https://collegeeducationnewsllc.com/biden-administration-will-cancel-500-million-in-student-loan-debt-key-details/
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