Biden Administration Cancels $ 500 Million Student Loan Debt: Here’s Who Eligible

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The Biden administration ruled to cancel student loan debt for 18,000 students who were defrauded by a commercial institution. See how it might affect you – and how to deal with college debt if you haven’t been forgiven for student loans. (iStock)

US Department of Education under the leadership of President Joe Biden, recently announced that 18,000 students who were defrauded by the ITT will receive a student loan forgiveness. In total, over $ 500 million in student debt has been written off, averaging nearly $ 28,000 per borrower.

The move is part borrower protection programwhich offers loan repayment forgiveness to students who feel they have been misled by the higher education institution. So far, the Biden administration has canceled $ 1.5 billion in student loans for approximately 90,000 borrowers under the program.

Former ITT students said the for-profit institute, which closed in 2016, made false claims about job prospects as well as the ability to transfer loans. The Department of Education found that the institute had misrepresented the potential earnings that an ITT degree would provide; in fact, ITT alumni have stated that including them on resumes makes it difficult to find a job.

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“Many of these borrowers have been waiting for help for a long time, and we must act quickly to make decisions for those whose claims have not yet been resolved,” Education Minister Miguel Cardona said in a statement. “This work also highlights the need for ongoing accountability so that institutions can never again commit this kind of widespread deception.”

While the defrauded ITT alumni paid off their loans, millions of other Americans are still paying off student loans. Broader measures to forgive student loans are still not available, so don’t wait for your loans to be paid off if you’re struggling to pay off your college debt. Instead, take advantage of record low student loan refinancing rates to save money on private student loans

How to know if student loan refinancing is right for you

Refinancing a student loan may help some borrowers pay off their loans faster and save money with a lower interest rate, but this is not suitable for everyone.

Not recommended refinance federal student loansfor example, as it means you will lose federal protections such as income-based payments and zero percent COVID-19 waiver. It could even strip you of your eligibility if the federal government decides to cancel your student loan debt in the future.

However, student loan borrowers who are in arrears on private student loans should consider refinancing while rates are at an all-time low. This can lower your student loan payments or help you pay off your private loans faster. Student loan cancellation does not apply to private loans, so there is no risk of losing benefits when refinancing them. You can compare student loan refinancing rates from several lenders at once using the Credible online marketplace.

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Still not sure if refinancing is a good idea?

Refinancing a student loan can save borrowers thousands of dollars in the loan repayment process. It is important to weigh the pros and cons and remember that this does not apply to everyone’s personal financial situation.

Those who refinanced their private student loans for a shorter term with Credible saved an average of $ 17,344. See if refinancing your student loan is a smart move for you using student loan repayment calculator

And if you still have questions, contact an experienced student loan consolidator on Credible for more information.

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Have a financial question but don’t know who to contact? Write to a safe money expert at moneyexpert@credible.com and your question can be answered by Credible in our Money Expert column.

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