Biden administration cancels $ 1 billion in student loans but fails rollout, regarding lawyers
The Biden administration has started implementing full student loan cancellation for tens of thousands of borrowers. But the deployment was bumpy.
In March, the administration announced it would write off more than $ 1 billion in federal student loans for 72,000 borrowers under the Borrowers Against Repayment Defense program, which was created to provide loan relief. students to borrowers defrauded by their schools. The Obama administration promulgated regulations governing this student loan cancellation program in 2016, but the Trump administration subsequently established new rules that limited eligibility and only granted partial relief to approved applications. defense of borrowers. Under President Biden, the Education Department rescinded several Trump-era borrower advocacy guidelines, including the partial relief policy. As a result, thousands of borrowers have become eligible for the complete cancellation of federal student loans associated with their borrower defense claims.
“Borrowers deserve a streamlined and fair path to access when they have been harmed by the misconduct of their institution,” Education Secretary Miguel Cardona said in a statement in March when the expanded relief was announced. for the first time. “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.” The department promised to cancel “100%” of federal student loans tied to borrowers and to repay them for all amounts paid.
But the education ministry was slow to implement the policy change and enact the student loan cancellation, even though many borrowers had already been waiting for years after submitting their initial borrower advocacy demands. Now, six months after the administration’s initial announcement, borrowers affected by the ministry’s policy change finally receive the promised cancellation.
However, some borrowers report problems with communications from the Department of Education. At least some of the letters to borrowers confirming relief referred to the incorrect school associated with their loans. Other borrowers have reported receiving conflicting information from employees of the ministry’s borrower advocacy hotline. And the emails the Ministry sends to borrowers regarding their decisions contain a link to post their notices on a website, which provides the borrower’s name, file number, and enrollment dates in an unencrypted, non-encrypted format. secured ; some advocates fear this could lead to identity theft, phishing attempts or other scams targeting borrowers.
Student loan borrower advocacy groups have expressed concern over the ministry’s difficult deployment, wondering how the administration could handle broader extensions of student loan cancellations or upcoming changes to the student loan service. for millions of borrowers if it has difficulty managing a few thousand accounts. “If the Department of Education is struggling to send 72,000 people a single correct email correctly, it doesn’t matter if it takes six months to do so, then how are they going to transfer 10 million student loan accounts? to new services before December? Braxton Brewington, press secretary for Debt Collective, a debtors union for student loan borrowers, said in a statement. The Ministry will have to transfer millions of student loan borrower accounts to new managers by the end of the year following the decision of two major student loan managers not to renew their contracts with the federal government . The Education Ministry did not immediately respond to a request for comment.
Yet the sweeping cancellation of student loans brought about by the Biden administration’s policy changes will have real and tangible impacts for thousands of borrowers. Tanya Lockett of Bremerton, Washington will get more than $ 17,000 in canceled federal student loans following the department’s re-determination she received this week.
“It’s huge for me, because [my loans have] prevented me from being able to buy a house because of the length of my credit, ”Ms. Lockett said. “I’m happy that I can pay off this debt and move on with my life, and I hope I can buy a house once I’m financially stable again.”
Biden student loan forgiveness now exceeds $ 9.5 billion, but eligibility is narrow
These student loans are excluded from Biden’s forgiveness and loan relief programs – here’s why
Student Loan Cancellation Debate Continues Amid Service Disruptions
Biden wants ‘targeted’ student loan cancellation – but what does that mean?