The US Department of Education has agreed to forgive $6 billion in student loans for 200,000 student borrowers.
Here’s what you need to know.
The Biden administration is continuing its commitment to forgive student loans for millions of student borrowers. As part of a class action settlement agreement, Sweet vs. Cardona, the Department of Education will provide full student loan forgiveness to approximately 200,000 student borrowers who have been misled by their college or university. Borrowers will also get a refund of student loan payments made and the removal of any associated negative marks on their credit report. This is a major victory for student borrowers who have been asking for student loan relief for several years. The announcement comes at a critical time as President Joe Biden considers large-scale student loan forgiveness for millions of student borrowers. The original class action included 264,000 student borrowers who attended more than 150 colleges and universities such as the University of Phoenix and DeVry.
Student Loan Forgiveness: Biden Forgave $8 Billion in Student Debt in Borrower Defense Until Repaid
Prior to this major student loan cancellation announcement, Biden canceled $25 billion in student loans. That amount included $7.9 billion in student loan forgiveness for 690,000 borrowers under defending borrowers from student loan repayments and school closures. Earlier this month, the Biden administration canceled $5.8 billion in student loans for 560,000 student borrowers. Borrower Defense of Repayment is an Obama-era rule that allows student borrowers to have their student loan forgiven if their school closes or they were misled by their college or university. Borrower defense against repayment has featured prominently in for-profit school lawsuits.
“From day one, the Biden-Harris administration has worked to address long-standing issues with the borrower defense process,” Cardona said. “We are pleased to have worked with the plaintiffs to reach an agreement that will provide billions of dollars in automatic relief to approximately 200,000 borrowers and which we believe will resolve the plaintiffs’ claims in a fair and equitable manner for all parties.”
How to qualify for this student loan forgiveness
Student borrowers who participated in this class action lawsuit will have their student loans forgiven. Here’s how to find out if you qualify:
- If you applied for Borrower Defense Until Repayment and you attended one of the eligible colleges or universities, your student loans will be forgiven.
- If you applied for Borrower’s Defense of Reimbursement and attended one of the eligible colleges or universities, but your application was denied, your Borrower’s Defense of Reimbursement application will be reinstated.
Termination of student loan: how to request a borrower’s defense to repayment
What if you didn’t participate in this class action but think you were misled by your college or university? You can request a borrower’s defense for student loan repayment online. To be eligible, you must demonstrate that:
- your college or university closed while you were enrolled or shortly after you dropped out, or
- your college or university has misled you.
As part of the borrower’s defense against repayment, you can obtain partial student loan forgiveness or full student loan forgiveness. If you don’t qualify for Borrower Defense Until Repayment, remember that there are other ways to get a lower student loan repayment, including: