Biden cancels $ 9.5 billion in student loans but no full forgiveness

Biden cancels $ 9.5 billion in student loans but no full forgiveness

College graduate video calls family to celebrate

Kemal Yildirim | Getty Images

Earlier in August, the US Department of Education, headed by President Joe Biden, announced it would write off an additional $ 1.1 billion in student loan debt for the approximately 115,000 borrowers attending the ITT Technical Institute. , now a former school. East.

According to the Department of Education, this latest round of forgiveness wipes out an administrative total of $ 9.5 billion for about 563,000 borrowers.

Experts say that despite a victory for many, this is not a sign that the widespread cancellation of student loans will come anytime soon.

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Indeed, the loans that have been canceled so far have been canceled under a program called “Repayment from Borrower Defense”. This targeted aid was created to prevent people from being deceived by schools that engage in professional misconduct or violate certain laws, for example by falsely claiming guaranteed employment or falsely telling students that the credits will be transferred. to other colleges.

This is separate from the Biden administration’s efforts to determine whether the president can legally write off federal student loan debt through executive order.

“These are apples and oranges,” said Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, a nonprofit organization.

play catch up

Yet headlines have dominated the headlines of canceled student loan debts in recent months, adding to borrower confusion and excitement. According to Mayotte, there has been a slight increase in recently canceled loans thanks to borrower advocacy as the Biden administration makes up for lost time.

The updated program rules were supposed to come into effect under former President Donald Trump, but have been delayed. Then, months before Trump stepped down, the old administration issued its own rules in July 2020.

“They have made it nearly impossible for anyone to find relief and block or stop any pending requests,” Mayotte said.

That changed when Biden took office in 2021. He relaunched the program and brought relief to thousands of borrowers.

“This front is underway now and it will likely continue,” said David Bergeron, a higher education expert who served as Acting Assistant Secretary for Post-Secondary Education and Assistant Assistant Secretary for Policy, Planning and Innovation. in the United States Department of Education during the Obama administration.

What’s next for full student loan forgiveness

Of course, the Biden administration is still working on a full forgiveness of student loans that will help millions of people struggling with repayment.

The president is currently awaiting reports from the Department of Education and the US Department of Justice which will set out his views on the legality of student debt cancellation through executive action.

“The government is working to do it the right way,” said Will Seeley, co-founder and CEO of Summer, a company that helps borrowers simplify and save on student loans.

The biggest risk for borrowers is that they fall into this legal black hole.

David Bergeron

higher education specialist

If Biden cancels some of the student loan debt through executive action, it is likely to be challenged in court and could lead to further problems for borrowers, if not. not confirmed. So according to Mayotte.

“I understand why he doesn’t go ahead with an executive order until he’s sure if he is challenged he would win,” she said, canceling the loan herself. Said about Biden’s reluctance.

Even though some lawmakers, such as Senate Majority Leader Chuck Schumer, DNY, and Senator Elizabeth Warren, D-Mass. While the United States has insisted that the president can legally write off student loan debt by executive order, not all experts are so sure and want to minimize the potential harm to borrowers.

“The biggest risk for borrowers is that they fall into this legal black hole,” Bergeron said.

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