Student Loan Forgiveness: Biden Will Cancel $ 1 Billion Student Debt For Deceived Borrowers

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The change will provide full loan forgiveness to 73,000 people who were deemed eligible under former Education Minister Betsy Devos but received only partial loan forgiveness. after she changed the cancellation calculation.
“Borrowers deserve a simplified and fair path to assistance if they have been affected by their institution’s misconduct,” said Education Minister Miguel Cardona. confirmed by the Senate earlier this month, said when he announced the change last week.

“A careful analysis of these claims and associated evidence has shown that these borrowers have been harmed and we will give them a fresh start,” he added.

The change comes as leading Democrats continue to push President Joe Biden to propose broader debt relief on student loans – the president, in his opinion, believes that this should be left to the discretion of Congress.

Narrow relief for commercial school students

The revised DOE policy is to write off debts to students whose schools have defrauded them, a principle known as “borrower protection.”

The process of forgiveness was simplified during the Obama administration, when it was discovered that large commercial colleges such as Corinthian and ITT Tech were misleading students and closing their doors under pressure from the federal government. For example, schools presented their prospective students with inflated employment figures.

Borrowers initially received 100% loan forgiveness if the Department of Education determined that their school had committed fraud. But DeVos changed the calculation, which resulted in partial debt relief for eligible borrowers based on their current income.

Betsy DeVos stalled Obama's student loan program.  Borrowers hope Biden will fix it
DeVos allowed massive lag behind more than 200,000 borrower protection claims accumulate – some people have been waiting throughout the Trump administration to see if they qualify for debt relief.
DeVos made it clear that she believed the Obama era was “bad politics“which puts taxpayers on the hook for debt relief costs without proper safeguards to determine who qualifies. She tried to rewrite the rule and suspended processing of applications. For about 15 months from 2018 to 2019, no applications were filed. Processed. …

Some Democrats insist on debt forgiveness

Biden’s change of administration does not match the more comprehensive program overhaul called for by defense groups.

“Giving up partial bailouts is a good start for a small group of borrowers, but what we want the Department of Education to do is overhaul the current borrower protection process,” said Toby Merrill, director of the Harvard Predatory Student Loan Project, which is suing DeVos. on issues related to the borrower protection rule.

In a press release, the Ministry of Education called the rule change a “first step” in addressing borrower protection claims and said it intends to take additional action.

Senate Majority Leader Chuck Schumer and Massachusetts Senator Elizabeth Warren lead group of democrats calling on Biden to forgive $ 50,000 in federal student loan debt to the borrower.

But Biden, who said he would support canceling $ 10,000 per borrower, has repeatedly resisted pressure, arguing that the government should not forgive debts to people who went to Harvard, Yale, and Penn.

He also indicated that he believes Congress should make changes through legislation that will make it harder to repeal them – although White House spokeswoman Jen Psaki said the administration open for consideration of the executive option.
The widespread write-off of federal student loan debt will be unprecedented. But memo lawyers from the Harvard Legal Services Center and its Predator Student Lending Project say the Department of Education has the authority to do so.

The department already has several more targeted debt cancellation policies. He writes off debts to defrauded students and disabled veterans. According to the National Student Legal Defense Network, Biden could make the lives of hundreds of thousands of borrowers easier by simply expanding these programs.

In one of his first acts in the office Biden extended the pause on student loan payments and interest, the Covid benefit introduced by Congress last year and already extended by the Trump administration. Federal student loan borrowers will not be required to make payments until October 1.



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