Department of Education Completely Cancels Federal Student Loans for Scammed Students
It will help borrowers who have frequented establishments that have engaged in “misconduct”.
The Education Department announced this week that it would fully forgive federal loans from borrowers who have enrolled in schools who “have engaged in certain faults.”
Under the Trump administration, some students received only partial relief, the department said. The Department of Education estimates the new formula could help about 72,000 borrowers receive $ 1 billion.
“Borrowers deserve a simplified and fair remedy when they have been harmed by the bad conduct of their institution,” the new Secretary of Education, Miguel Cardona, said in a statement. “Careful examination of these claims and the associated evidence has shown that these borrowers have been wronged and we will give them a fresh start on their debt.”
In 2019, then Education Secretary Betsy DeVos came under scrutiny in her handling of the issue when she appeared before the Education and Labor Committee of the Bedroom. The education ministry said it will now ensure that borrowers whose applications have been approved “have a streamlined path to receive full discharge of their loan,” including those who had previously received “less than that. ‘a complete discharge of their loan “.
The department added that it “would also pursue additional actions, including re-regulation, in the future.”
Democrats, including House of Commons Education and Labor Committee chair Bobby Scott of Virginia, applauded the move.
“For more than four years, defrauded borrowers and their families have lived under a cloud of student debt that they shouldn’t have to pay off,” he said in a statement. “I applaud the Biden administration for doing the right thing in healing these borrowers, and I can only imagine the mixture of joy and relief they feel today. This announcement is life changing for dozens. thousands of people across the country. “