White House could help defrauded student borrowers get pardons

US President Joe Biden.

Drew Anger | Getty Images

The Biden administration is taking steps to make it easier for people who claim to have been defrauded by their colleges to get their federal student debt forgiven.

Since President Joe Biden took office, the U.S. Department of Education has forgiven about $2 billion in student loans for more than 100,000 borrowers who have filed “borrower defense to repayment” claims, alleging fraud and deception against a school.

The relief is a stark reversal from the Trump administration’s tenure of former Education Secretary Betsy DeVos, during which tens of thousands of student debt forgiveness requests were denied despite their claims that their schools have engaged in misconduct.

“Very few requests have been processed under the Trump administration, other than cursory denials,” said higher education expert Mark Kantrowitz. “The Biden administration has made more progress, but there’s still a big backlog.”

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Now, changes to the borrower’s defense to the demand for repayment, which were negotiated by a committee of stakeholders organized by the Ministry of Education, could make the process more user-friendly for borrowers. Possible changes include extending the time in which a borrower can submit a claim and simplifying the documentation of fraud suffered.

There is also a proposal to forgive entire groups of pupils at certain schools who have been found to be problematic, rather than requiring a borrower to individually claim that they have been wronged.

“A key issue with borrower defense against repayment is the requirement for case-by-case review, even when the same issues apply to multiple borrowers,” Kantrowitz said.

These changes could be released by the Ministry of Education as early as this spring for public comment.

The administration is under pressure to go beyond canceling the debt of defrauded borrowers.

During the election campaign, Biden promised to forgive $10,000 in federal student loan debt for everyone.

Senate Majority Leader Chuck Schumer, DN.Y., and Sen. Elizabeth Warren, D-Mass., are pushing him to write off closer to $50,000 per borrower.

Nearly 66% of likely voters support the president’s cancellation of student debt, with more than 70% of Latino and black voters in favor, according to a recent poll.

Speaking on broad student debt cancellation at a virtual summit hosted by the Student Debt Crisis Center on Wednesday, Schumer said the White House “seems more open than ever.”

Most recently, the Biden administration extended the ongoing payment pause for federal student loan borrowers for another four months, through September, after earlier saying it wanted to make its decision on the pardon before resuming. the bills.

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