Who Qualifies For Student Loan Forgiveness Under Settlement With Education Department

Last week, the Biden administration began notifying borrowers that they qualify for student loan forgiveness and other debt relief after a federal court allowed a landmark settlement agreement to move forward.

Here’s who’s eligible, and what borrowers should know.

Billions in student loan forgiveness and debt relief will be implemented under the Department of Education

A federal district court last month rejected a challenge to end a settlement agreement Sweet vs Cardona Case. The case, a class action lawsuit alleging the Department of Education illegally withheld or rejected hundreds of thousands of borrower defense for repayment applications, spanned two administrations. The Borrower Defense Program may provide student loan forgiveness and related debt relief for borrowers who were defrauded by their schools, such as through misrepresentation about admissions standards or career outcomes.

The settlement agreement, which would provide $6 billion in loan repair and payment refunds to more than 200,000 borrowers along with student loan cancellation, was approved last fall. Implementation was set to begin in January.

But before the Department of Education could proceed further, several schools listed as eligible institutions in the Appendix of the Settlement Agreement sought to intervene in the matter and block settlement relief, claiming both that the process of obtaining settlement and settlement was unfair. Was and will damage his reputation. , The court rejected these arguments in a decision Last month, permission to start settlement relief.

Eligible for student loan forgiveness under ‘automatic discharge group’ settlement agreement

a member of Sweet V. cardona Classes are now poised to receive potentially significant student loan relief. To be a member of the class, borrowers must submit a Borrower Defense Application for Repayment to the Department of Education by June 22, 2022 and participate in a settlement agreement with one of dozens of institutions. List of Approved Schools,

These borrowers will receive automatic student loan forgiveness for their applicable federal student loans, as well as refund of past due payments and credit repair for negative credit reporting associated with relevant delinquent accounts. The education department will release the relief on a rolling basis over a period of one year.

Notably, settlement relief for borrowers who attended one of the three intervenor schools challenging the settlement is still halted while those schools appeal to a higher federal court. The three schools are Lincoln Educational Services Corp., American National University, and Everglades College.

Other Class Members Can Receive Student Loan Forgiveness Under Agreement

who submitted a borrower protection application before June 22, 2022, but did No One can also get relief under the settlement after attending one of the listed schools. However, relief is not guaranteed.

These Class Members, who together comprise the “Decision Group”, will receive an individual decision on their eligibility for Settlement Relief in accordance with the timeline set forth below, as outlined by Project on Predatory Student Loans, an organization representing a class of student loan borrowers:

• for borrower protection applications submitted on or before December 31, 2017, within six months from the effective date of the Settlement Agreement;
• For applications submitted from January 1, 2018 to December 31, 2018, within 12 months of the effective date;
• For applications submitted from January 1, 2019 to December 31, 2019, within 18 months of the effective date;
• For applications submitted from January 1, 2020 to December 31, 2020, within 24 months of the effective date; And
• For applications submitted within 30 months of the effective date from January 1, 2021 to June 22, 2022.

Borrowers in this “decision group” would also be entitled to a “streamlined” borrower defense application review process. Under this process, the Department of Education “will presume all allegations in the application to be true; will not require further supporting evidence; will not require proof of reliance; and will not invoke any statute of limitations,” according to the Project on Predatory Student Lending. According.

After-Class Applicants Can Receive Student Loan Forgiveness Under Settlement

who submitted a borrower defense to the repayment application Afterwards June 22, 2022, but Earlier Sweet V. cardona The settlement agreement was approved by the court on November 16, 2022, treating them as “class later applicants”. These borrowers are not automatically entitled to relief under the Settlement Agreement, regardless of the school they attended. But they can still benefit.

According to the Project on Predatory Student Lending, “under the settlement, post-class applicants will receive decisions on their applications within 36 months”. “If the Department fails to provide a decision to any post-class applicants during that time period, they will receive full settlement relief” – effectively converting them into a member of the “Automatic Discharge Group” and making them students Grant of loan waiver rights and other related debt relief.

Borrowers who are not covered by the settlement can still apply for student loan forgiveness through Borrower Protection

Borrowers who are neither members of the class nor subsequent applicants of the class are not covered by Sweet V. cardona Settlement. However, any borrower may submit a borrower defense to the repayment application if they have been misled or otherwise defrauded by their school. The Department of Education will determine eligibility for relief on a case-by-case basis.

Borrowers can review borrower defense applications through the Department of Education online portal, The Department for Education has also recently published detailed guidance outlining the types of school misconduct that could give rise to a borrower defense claim; The guidance also provides helpful tips for strengthening the borrower’s application and increasing their chances of approval.

This July, the new federal rules will go into effect. These new rules will expand the range of school misconduct that may qualify a borrower for relief under the Borrower Defense Program, and will make it easier for the Department of Education to process mass discharges.

Borrowers interested in learning more about Sweet V. cardona can read agreement detailed overview Provided by Project on Predatory Student Lending

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