Government plans to cancel $6 billion in student loans for fraudulent borrowers

The Biden administration updated and implemented its borrower protection plan earlier this month Nearly $6 billion in debt will have to be written off to 580,000 borrowers who have studied at Corinthian colleges, a major chain that was shut down in 2015 after widespread allegations about illegal recruitment tactics. Borrower security claims have been filed in half a dozen or more schools.

But there has been mass denials among Ms. Divos, as well as tens of thousands of requests for help pending, many of them years out. Wednesday’s deal will remove denials that they say will never happen. The agreement promises to automatically resolve all non-filed applications—for schools not on the settlement list—within six to 30 months.

“This important proposed solution will provide answers and reassurance to borrowers who have struggled long and hard for a fair settlement of their claims after they were defrauded by their schools and ignored or rejected by their government,” said Eileen Connor. Student loan theft scheme, which represents the borrowers in the case.

The contract waiver will primarily be granted to those who filed the Borrower Protection Application on or before June 22, 2022. It remains to be seen whether the Ministry of Education will approve future claims of school-educated students.

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the master. Biden is still contemplating a bigger decision: whether to take administrative action to fulfill a campaign promise to cancel $10,000 in federal student loans for all borrowers. High inflation has intensified the debate among his advisers About the wisdom of such work.

Megan Vasquez

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