June 24, 2021

Biden Cancels $1 Billion Of Student Loans

Biden Cancels $1 Billion Of Student Loans

This story is developing.

The Biden administration is cancelling $1 billion of student loans.

Here’s what you need to know.

Student Loans

In the ongoing debate over student loan cancellation, at least some borrowers will get student loan forgiveness. In a major announcement, the U.S. Department of Education will enact student loan cancellation for 72,000 student loan borrowers who previously had some student loans cancelled, but now will get full student loan cancellation. The Biden administration says the previous formula to cancel student loans in cases of fraud or school closure that was used in the Trump administration — which often created partial student loan forgiveness — was unfair to student loan borrowers.

Under a federal law known as the borrower defense to repayment, borrowers could get federal student loan cancellation if they attended a school that engaged in deceptive or illegal practices or closed suddenly. In 2016, the Obama administration issued new rules to protect student borrowers and get student loan relief. These rules existed as a form of consumer protection because absent these rules, student loan borrowers would still have to pay off student loans even if they didn’t find gainful employment after attending schools such as ITT Technical Institute or Corinthian Colleges.

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