The Biden administration canceled $3.9 billion in student loan debt for students who attended certain universities. (iStock)
The Biden administration announced it will discharge any remaining federal student loan debt for borrowers who attended ITT Technical Institute from Jan. 1, 2005 through its closure in September 2016.
The Department of Education made this announcement based on its findings from extensive internal records, testimony from ITT managers and recruiters and first-hand accounts from borrowers. It will result in 208,000 borrowers receiving $3.9 billion in full loan discharges, including those who have not yet applied for a borrower defense to repayment discharge. Borrowers will not need to take any action to receive this forgiveness.
"It is time for student borrowers to stop shouldering the burden from ITT's years of lies and false promises," Secretary of Education Miguel Cardona said. "The evidence shows that for years, ITT's leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs, with no regard for the hardship this would cause.
"The Biden-Harris Administration will continue to stand up for borrowers who've been cheated by their colleges while working to strengthen oversight and enforcement to protect today's students from similar deception and abuse," Cardona said.
If you have private student loans, these will not qualify for federal student debt cancellation. However, you can reduce your monthly payment by refinancing to lower the interest rate. Visit Credible to find your personalized interest rate without affecting your credit score.
Department of Education announces more student loan forgiveness
Additionally, the Department of Education announced it formally notified DeVry University it is required to pay millions of dollars toward approved borrower defense applications. The for-profit college chain has the option to submit information on why it should not be required to pay these liabilities or request a hearing before the Department’s Office of Hearings and Appeals.
The department said it also approved of discharges for nearly 100 borrowers who enrolled in the medical assistant or medical billing and coding program at Kaplan Career Institute’s Kenmore Square location in Massachusetts from July 1, 2011 to Feb. 16, 2012 when it stopped enrolling new students.
These borrowers were identified by the Massachusetts Attorney General after an investigation found the institution lied about its job placement rates to borrowers. The location closed in February 2013.
Through its current loan forgiveness programs, these specific actions brought the total amount of loan relief approved by the Biden Administration to nearly $32 billion for 1.6 million borrowers, including $13 billion related to institutions that took advantage of borrowers.
If you have private student loans, these will not qualify for federal student loan forgiveness, but you can reduce your monthly payments through a refinance. Visit Credible to compare multiple student lenders at once and choose the one with the best interest rate for you.
Biden administration cancels $10K in student loan debt per borrower
President Joe Biden announced Wednesday that he is cancelling $10,000 in student debt for borrowers and $20,000 in student loan debt for Pell Grant borrowers. The student loan forgiveness is available for borrowers who earn less than $125,000 per year for an individual or $250,000 per year for a married couple.
"In keeping with my campaign promise, my administration is announcing a plan to give working and middle class families breathing room as they prepare to resume federal student loan payments in January 2023," Biden said in a tweet.
The Biden administration also extended the COVID-related forbearance for student loan payments which had been paused until Aug. 31, pushing the forbearance back to Dec. 31, 2022. During this time, borrowers are not required to make payments on their loans and interest rates have been set to 0%. The Department of Education has also stopped collections on defaulted loans during this time.
The department said it will announce further details on how borrowers can claim this relief in the weeks ahead. The department estimates that nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available.
If you have private student loans, they will not be affected by Biden’s student loan decision. You can reduce your monthly payments by refinancing your private student loans. Visit Credible to speak to a student loan expert and get all of your questions answered.
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