Student Loan Forgiveness: Another 264,000 Borrowers Will Get Debt Cancelled In ‘Landmark’ Settlement Agreement With Biden Administration

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The Biden administration has agreed to settle a class action lawsuit brought by student loan borrowers for alleged mismanagement of the Borrower Defense for Repayment Program — a major student loan forgiveness program. Under the terms of the settlement agreement, the Department of Education will cancel approximately $6 billion in federal student loan debt for more than 200,000 borrowers.

here are the details.

Student loan forgiveness for borrowers misled by their schools

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The purpose of the settlement agreement is to resolve Sweet v. Devosi, a year-long class action lawsuit originally brought by student loan borrowers for failure to process and approve repayment applications to thousands of borrower defenses against the Trump administration. The Borrower Defense Program allows federal student loan borrowers to apply for loan forgiveness if they have been misrepresented or made false promises or false promises about key aspects of their educational program, such as admissions, transferability of credit, or careers. was enrolled or remaining enrolled in an institution due to Earning prospects.

Lawsuits and subsequent filings by borrowers allege that the Department of Education allowed them to make repayment through debtor defense by delaying or refusing to process applications (in some cases for years) and subsequently issuing blanket denials without a full review. The relief sought for was wrongly refused. The lawsuit was not resolved until the 2020 presidential election, and the Department of Education continued to prosecute the matter under the Biden administration.

Under the terms of the proposed settlement agreement, 264,000 federal student loan borrowers who have already submitted borrower defense applications will be approved for student loan forgiveness, which is expected to amount to approximately $6 billion. Dozens of schools — all for-profit institutions — are listed as eligible borrowers for discharge under the agreement, including DeVry, the Institute of the Arts and the ITT Technical Institute.

“This important proposed agreement will provide answers and certainty to borrowers who have sought long and fair resolution to their borrower defense claims after being defrauded by their schools and ignored or even rejected by their government. fought hard,” said Eileen Connor, director. Project on Predatory Student Loans, which represents the class of student loan borrowers in the suit. “This will not only help secure billions of dollars in loan cancellations for fraudulent students, but chart a borrower defense process that is fair, equitable and efficient for future borrowers.” The project called the agreement a “historic” resolution.

“From day one, the Biden-Harris administration has worked to resolve long-standing issues related to the borrower defense process,” Education Secretary Miguel Cardona said in a statement. “We are pleased to work with Plaintiffs to reach an agreement that will provide billions of dollars in automatic relief to approximately 200,000 borrowers, and we are confident that Plaintiffs’ claims will be resolved in a fair and equitable manner for all parties involved. ” Notably, Cardona did not mention that the department refused to admit any wrongdoing as part of the settlement agreement.

The settlement agreement must still be approved by the judge presiding over the trial.

Relief After Other Student Loan Forgiveness Initiatives Through Borrower Defense

The settlement agreement follows a separate borrower defense initiative by the Biden administration earlier this month, under which the Department of Education agreed to automatically cancel the federal student loan debt of more than half a million borrowers who previously went to Corinthian Colleges. Which was a notorious national chain for-profit. The schools closed in 2015 after widespread allegations of misconduct. The administration has indicated that borrowers do not even need to submit an application to qualify for that relief.

However, other borrowers will be required to submit a borrower defense for repayment application. The agreement, announced this week, only covers borrowers who have already submitted borrower defense applications. The department indicated in the settlement agreement that the “appearance at one of the [listed] Schools justify projected relief [under Borrower Defense to Repayment]… based on strong indications regarding substantial misconduct by the listed schools.” This suggests that borrowers who went to these schools, but have not yet applied for relief, have a fair chance of being approved. Maybe if they were subject to false promises or misrepresentation and submit an application.

Lenders can access settlement details and list of covered schools Here, To apply for debtor defense for repayment, you can initiate the process Here,

further student loan reading

560,000 borrowers will get automatic student loan forgiveness, but others can still apply for relief

Biden is reportedly close to a decision on comprehensive student loan cancellation – here’s where things stand

Biden’s new student loan forgiveness change could end up costing some borrowers

Want Student Loan Forgiveness? To qualify, borrowers may first need to

Credit: www.forbes.com /

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