President Joe Biden will cancel $3.9 billion in student loans.
Here’s what you need to know – and what it means for your student loans.
The Biden administration announced today that it will repay all remaining federal student loans for 208,000 student borrowers who attended the ITT Technical Institute (ITT), a for-profit college, from January 2005 until its closure in September 2016. These student borrowers will receive repayment relief from the Borrower Defense and will not have to request that their student loans be canceled. Biden’s major announcement comes at a critical time as he mulls whether to enact a large-scale student loan foreclosure and extend the student loan payment pause for millions of student borrowers.
“It’s time student loans stopped shouldering the burden of ITT’s years of lies and false promises,” said Secretary of Education Miguel Cardona. “The evidence shows that for years ITT executives have deliberately misled students about the quality of their programs in order to benefit from government student loan programs, regardless of the hardship it would cause. The Biden-Harris administration will continue to advocate for borrowers who have been defrauded by their colleges while working to strengthen oversight and enforcement to protect today’s students from similar deception and abuse.”
In June, the Biden administration canceled $6 billion in student loans to 200,000 student borrowers amid pleas for borrowers to repay.
Student Loan Forgiveness: Canceled $32 billion in student loans
Since becoming president, Biden has canceled nearly $32 billion in student loans, including:
- Borrower defense to repayment: $13 billion in student loans to 1 million student borrowers who received a student loan exemption through Borrower Defense for student loan repayments and school closures;
- Public Service Loan Forgiveness: $9.6 billion in student loans to 175,000 student borrowers; and
- Total and Permanent Disability: $9 billion in student loans to more than 425,000 student borrowers due to a total and permanent disability.
Student Loan Cancellation: How to Apply for Borrower’s Defense for Repayment
The borrower’s defense against repayment is an Obama-era rule that helps student loan borrowers cancel their student loans if their college or university is closed or they were misled. While today’s student loan cancellation announcement is automatic, not every student loan borrower qualifies. However, you can file for a student loan repayment borrower defense online. To qualify, you must demonstrate the following:
- your college or university was closed during your enrollment or shortly after your de-enrollment, or
- Your college or university has misled you.
As part of the borrower’s defense against repayment, you can obtain partial or full student loan forgiveness.
Student Loan Cancellations: Will Biden Cancel More Student Loans?
Is Biden potentially just days away from calling in student loans for more than 40 million student borrowers? Student loan borrowers await Biden’s announcement of sweeping student loan forgiveness and student loan payments pause. Biden’s decision on sweeping student loan forgiveness is separate from today’s announcement of targeted student loan cancellation for student loan loans by the borrower’s defense pending repayment. The student loan payment pause ends on Aug. 31, 2022, and Biden has remained silent on whether he will extend student loan easements. While Biden has promised an announcement on large-scale student loan forgiveness before August 31, 2022, there is no guarantee that Biden will cancel $10,000 (or any other amount) in student loans to more than 40 million student loan recipients. Republicans announced a blockbuster plan for student loan forgiveness while calling for an end to the student loan freeze. Regardless of Biden’s decisions about possible student loan forgiveness and the student loan suspension, make sure you have a clear, long-term plan for student loan repayments. Here are some of the best ways to pay off student loans faster and save money: