Biden administration approves $415 million in new student loan forgiveness under struggling program: key details

The US Department of Education announced Wednesday that it has approved $415 million in new student loan forgiveness for borrowers defrauded by their schools.

“The Department remains committed to granting discharges to borrowers when evidence shows their college has violated the law and standards,” U.S. Secretary of Education Miguel Cardona said in a statement. “Students rely on their colleges to tell the truth. Unfortunately, today’s results show too many cases of students being misled by loans from institutions or programs that failed to deliver on their promises.

Here are the details on the latest relief wave.

Student Loan Forgiveness Under Borrower’s Defense Against Repayment

The student loan forgiveness announced today by the Biden administration is provided under a federal loan release program called Borrower Defense to Repayment. This program clears federal student loan debt for borrowers who have been defrauded by their school (often, for-profit schools) through misrepresentation and other fraudulent behavior related to key aspects of the educational program such as admissions, credit transferability or career prospects. .

For years, the borrower defense program has been mired in legal and political wrangling. The Obama administration first adopted regulations and procedures governing the aid program in 2016. But under former Education Secretary Betsy DeVos, the Department of Education issued new rules that have disrupted the program, increasing the burden of proof on the borrower and weakening the assistance available. The Department also enacted a controversial “partial relief” policy, under which the Department could provide little or no student loan forgiveness, even for applications it had approved. These issues, along with a massive backlog of unresolved borrower defense claims, have been the subject of multiple lawsuits filed in federal court.

Now, the Biden administration is embarking on new efforts to overhaul borrower defense regulations to make them more borrower-friendly. In addition, the administration reversed the DeVos-era “partial repair” policy, which will allow borrowers to receive full student loan forgiveness for approved applications, as well as refunds for payments already made. And the Education Department has been slowly working through the remaining backlog of tens of thousands of borrower defense applications, some of which have gone unaddressed for years.

Details on latest round of student loan forgiveness through Borrower Defense to Repayment

According to the Education Department, the latest wave of $415 million in approved borrower defense claims will be distributed to 16,000 borrowers who attended specific for-profit educational institutions, including DeVry University, the Westwood College and ITT Technical Institutes. The Department presented its findings on alleged school misconduct in a detailed report declaration.

The Department’s rulings against ITT in particular — which collapsed in 2016 following widespread allegations of misconduct — represent its fourth finding that the school lied to borrowers about key aspects of its program. A new report released this week by the Project on Predatory Student Lending revealed additional details about the school’s alleged practices, including aggressive recruiting, widespread use of the available student loan debt ceiling, and ineffective job placement services.

“Every student who has attended ITT is a victim of their fraud, and everyone deserves justice,” Eileen Connor, director of the Predatory Student Loans Project, said in a statement accompanying the report’s release on Wednesday. “The cancellation of all of ITT’s remaining debts is the only reasonable and reasonable course of action.”

The department says that with the latest wave of student loan forgiveness, it has now approved about $2 billion in new borrower defense claims for more than 107,000 borrowers over the past year.

How to Qualify for Student Loan Forgiveness Under Borrower Defense Until Repayment

Borrowers who believe they may qualify for relief under today’s announcement should be notified in the coming weeks. In the meantime, the Ministry of Education has set up a website where borrowers can get updates.

The Borrower Defense Until Repayment Program remains active, and borrowers who believe they have been defrauded by their school can still seek relief. Borrowers can obtain application information through the Borrower Defense Portal.

In its statement Wednesday, the department said it “will continue to approve all applications it subsequently receives from borrowers who participated [these schools] during the period of demonstrated misconduct and who raise allegations supported by the evidence we have reviewed.

Further Reading on Student Loans

One Million Borrowers Could Get Expanded Student Loan Forgiveness Starting This Month, Biden Official Says

Student loan forgiveness: ‘We’re going to win,’ says top Democrat, as poll shows broad support for debt forgiveness

Unraveling Student Loan Forgiveness: Who Qualifies for Three Complicated Programs for Public Service Workers

Is student loan forgiveness taxable in 2022? It is complicated.

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