Student Loan Forgiveness: Biden Releases Scam Victims From Debt

The Biden administration has forgiven $1 billion in student loan debt for people defrauded by for-profit colleges. The move, which comes as a reversal of Trump-era practices, involves alerting eligible candidates in the next few weeks, The Washington Post reports.

Under former Secretary of Education Betsey DeVos, loan forgiveness was calculated based on the current earnings of the candidate. For many scammed students who never completed their degrees and were buried in debt, that meant it was impossible for them to get relief.

Newly confirmed Secretary of Education Miguel Cardona has returned the department to the standard under the Obama administration, granting full forgiveness to students who were defrauded by colleges.

“Borrowers deserve a simplified and fair path to relief when they have been harmed by their institution’s misconduct,” Cardona said. “A close review of these claims and the associated evidence showed these borrowers have been harmed and we will grant them a fresh start from their debt.”

In addition to simple debt relief, successful applicants will have the Department of Education request the hit to their credit score also be removed. They will also be eligible to receive federal aid.

That said, there are still many unprocessed claims. The current change applies to only 72,000 of 200,000 total applications. Going forward, the Biden administration says to expect more rewrites of department guidelines around debt forgiveness.

The Education Department recently released documents showing Trump leadership directing employees to stop processing applications and issue mass denials to everyone applying for forgiveness.

Workers were expected to review five cases per hour minimum. Rejections said the claim could be submitted for reconsideration, but when placed under oath officials admitted there was no such process.

The Trump administration denied the allegations when sued in 2019. Litigation is still ongoing after a settlement proposal was rejected by a judge in October because DeVos' department had rejected 94% of requests for relief.

“The previous administration turned borrower defense into a total sham that was rigged to deny claims without any true consideration,” Toby Merrill, director a group representing the borrowers, told The Washington Post. “The Biden-Harris administration must now address these failings or else perpetuate a system that is stacked against the very students they are supposed to protect.”