- Advertisement -

- Advertisement -

Approximately $238 million worth of student loan debt has been forgiven for 28,000 former students of Marinello Schools of Beauty, the Department of Education announced in a press release,

– Secretary of Education Miguel Cardona

This recent round of student loan forgiveness applies to borrowers who filed borrower defense claims with the Education Department, as well as other former Marinello students who were enrolled from 2009 through the school’s closure in February 2016.

“Today’s announcement will streamline access to debt relief for thousands of borrowers caught up in Marinello’s lies,” Education Secretary Miguel Cardona said. “At the Department of Education, we will continue to strengthen oversight and enforcement for colleges and career schools that engaged in misconduct and uphold the Biden-Harris Administration’s commitment to helping students who have been harmed.”

The department has also added leadership positions within the Federal Student Aid (FSA) Office of Enforcement to ensure oversight in reviewing additional borrower defense claims.

Keep reading to learn more about who has received student loan forgiveness under the Biden administration, as well as your alternative debt relief options if you don’t qualify for these programs. One option is to refinance to a private student loan with better repayment terms. You can visit Creditable to compare student loan refinance rates for free without impacting your credit score.

4 IN 5 BORROWERS COULD BENEFIT FROM STUDENT LOAN FORGIVENESS, BUT THE PRICE TAG IS HIGH

Who qualifies for the borrower defense program?

The borrower defense to repayment program offers student loan discharges for borrowers who were misled or defrauded by their school while they were enrolled. To qualify, applicants must file a borrower defense claim through the Education Department proving that their college engaged in widespread misconduct.

Upon reviewing claims for about 300 former Marinello students, FSA found that the now-defunct cosmetology school failed to provide the education it promised. In particular, “Marinello left students without instructors for weeks or months at a time,” making it difficult for them to pass the state licensing tests necessary to work in their field.

“Not only did Marinello fail to teach its students, class-action lawsuits filed in Nevada and California alleged that the school used salons as profit centers and exploited students as a source of unpaid labor,” the department said.

Former students of Marinello Schools of Beauty will soon begin receiving communications from the Education Department, with discharges expected in the following months. Eligible borrowers don’t need to take any further action to receive student debt forgiveness.

If you don’t meet the eligibility requirements for the borrower defense program, you might consider student loan refinancing as an alternative debt repayment option. Keep in mind that refinancing federal student loans would make you ineligible for select programs like income-driven repayment, COVID-19 administrative forbearance and other federal debt relief measures.

you can learn more about student loan refinancing by getting in touch with a knowledgeable loan expert at Credible, so you can decide if this strategy is right for your financial situation.

STUDENT LOAN BORROWERS FACE DIFFICULTY WITH INCOME-DRIVEN REPAYMENT PLANS

Biden admin has forgiven $18.5B in student loan debt so far

After these recent actions, the Education Department estimates that more than 750,000 borrowers have received $18.5 billion worth of debt cancellation since President Biden took office through the following federal student loan forgiveness programs:

  • Total and permanent disability discharges (TPD). More than 400,000 borrowers with a total and permanent disability have qualified for more than $8.5 billion worth of student debt forgiveness under the TPD discharge program.
  • Public Service Loan Forgiveness Program (PSLF). Through a limited PSLF waiver implemented by the Biden administration in October 2021, approximately 113,000 federal student loan borrowers have received $6.8 billion worth of discharges.
  • Borrower defense discharges. About $2.1 billion worth of student loan debt has been discharged for 132,000 borrowers who filed borrower defense claims. This includes former students of Marinello, Westwood College, ITT Technical Institute and the Court Reporting Institute.
  • Closed school discharges. An estimated 115,000 students who attended the now-defunct ITT Tech colleges without completing their degree have qualified for $1.26 billion worth of closed school discharges.
  • Income-driven repayment plans (IDR). In late April, the Biden administration announced updates to the IDR program that brought about 3.6 million borrowers closer to receiving student loan forgiveness. As part of the changes, thousands of borrowers became immediately eligible for a discharge.

Additionally, the president recently told reporters at the White House that he is considering canceling some student debt for all federal borrowers. As a presidential candidate, Biden campaigned on canceling $10,000 worth of federal student loan debt per borrower.

If you’re struggling with private student loan debt, you may be able to reduce your monthly payments and pay off debt faster by refinancing to a new loan at a lower interest rate. You can browse current interest rates in the table below, and use Creditable’s student loan refinance calculator to estimate your potential savings.

WHO IS MY STUDENT LOAN SERVICER?

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.