Biden Administration Cancels $ 500 Million Student Loan Debt – Key Facts

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On Wednesday, the Biden administration announced it would cancel $ 500 million in student loan debt for thousands of student loan borrowers.

The student loan forgiveness will be provided under the Borrower Protection to Maturity Program. A program that has been established with official regulations and procedures in accordance with Obama administration in 2016 forgives student loans to students who have been misled, defrauded, or otherwise harmed by predatory colleges and universities – often for-profit schools.

Under the leadership of former Education Minister Betsy DeVos, the Department of Education issued new rules governing the borrower protection program that significantly weakened the assistance available and increased the burden of proof needed to win. The department also introduced a controversial new policy of granting partial (rather than full) student loan forgiveness for approved applications.

Under the Biden administration, Education Minister Miguel Cardona changed the “partial compensation” policy for approved borrower protection applications, allowing borrowers to receive a full student loan forgiveness along with reimbursement of payments already made.

The latest wave of borrower protection approvals calls for a complete cancellation of the federal student loan for 18,000 borrowers who attended the ITT technical institutes, a network of commercial colleges that collapsed in 2016 over allegations of widespread fraud. These permits are in addition to the Borrower Protection Benefits announced by the Department of Education earlier this year, which will affect 72,000 additional student loan borrowers who have applied for loan forgiveness.

“Our actions today will give thousands of borrowers a fresh start and the relief they deserve after ITT has lied to them on numerous occasions,” Secretary of State Cardona said in a statement. statement… “Today’s action is part of the Biden-Harris administration’s continued commitment to protect borrowers when their institutions take advantage of them. Many of these borrowers have been waiting for help for a long time, and we need to make quick decisions for those whose claims have not yet been resolved. This work also highlights the need for ongoing accountability so that institutions can never again commit this kind of widespread deception. ”

According to the statement, the Ministry of Education will begin notifying borrowers of their approval in the coming weeks, and then will work “on a rush basis” to cancel loan balances for those borrowers.

However, the student debt cancellation announced today accounts for a tiny fraction of the outstanding student loan debt, and advocates for student loan borrowers continue to pressure the administration to take action for wider student loan forgiveness. Last week, human rights activists demanded that the administration automatically write off the $ 500,000 student loan debt. disabled borrowers and millions of borrowers are looking for help in Public Service Loan Forgiveness Program (PSLF)… Meanwhile, the Biden administration is in the process of due diligence to determine if the president has the power to unilaterally cancel student loan debt on a broader scale using executive action. Results of this review may be released in the coming months

Further reading

Biden Administration Announces Significant Renewal of Income Based Loan Repayment and Student Loan Forgiveness Programs

Will Biden cancel student loan debt? We will soon find out

Biden student loan forgiveness review: should you take steps now to cancel your student debt later?

New data shows that most of those who apply for this student loan forgiveness program are denied

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