Biden administration canceled $ 1.5 billion in student loans via borrower defense: how to apply
President Joe Biden has campaigned to write off up to $ 10,000 in student loan debt per borrower, but federal student loan forgiveness legislation has proven difficult to enact. Although the widespread cancellation of student loans is still out of reach, the Department of Education has been able to approve student loan repayments worth $ 1.5 billion thanks to the defense of the borrower against repayment.
Borrower Defense is a program offered by the Federal Student Aid Office (FSA) to write off the federal student loan debt of borrowers who have been misled by their institution of higher education. This includes schools that have engaged in misconduct in violation of applicable state laws.
The Biden administration approved borrower defense claims for about 92,000 students who attended for-profit colleges such as the ITT Technical Institute, Westwood College, Marinello Schools of Beauty, and the Court Reporting Institute. Under the Obama administration in 2013, students filed similar claims after Corinthian colleges closed.
Read on to learn more about borrower defense rules and what you can do if you don’t qualify. Alternatives to borrower’s defense include enrolling in an income-based repayment plan, researching other student loans sorry and rfinance your student loan debt.
If you decide to refinance your student debt, visit Credible to compare offers from several private student lenders at once without affecting your credit score.
STUDENT LOAN INTEREST RATES DROP TO LOWEST BETWEEN MAY AND JUNE
How to apply for a borrower’s defense
You may be eligible for the Borrower Against Repayment Defense program if you’ve attended a school that has previously misled students about the quality of their program or earning potential. For example, the Department of Education canceled loans from 18,000 ITT Tech students who claimed the school had misled them about their job prospects, placement rate and the ability to transfer credits.
To apply for the borrower’s defense, you must complete an application form. You will need to provide transcripts and other information about your school, as well as your loan recovery status. You will also need to prove a basis for the borrower’s defense by including:
- School promotional material including brochures, enrollment agreements, websites and emails
- The name and title of the school officials who misled you, if they are known
- What information the school provided or did not provide
- Why do you think you’ve been misled
It takes about 30 minutes to complete the application process. You can find more frequently asked questions on the FSA website.
5 STUDENT LOAN REFORMS AS DEVOS IS REPLACED BY EDUCATION SECRETARY MIGUEL CARDONA
What to do if you don’t qualify for your student loan waiver
Only a fraction of the 45 million student loan borrowers in the United States qualified for a student loan forgiveness under the Biden administration. While it is possible to ask the Department of Education to reconsider your borrower defense request by mail, you have other options if you are not eligible for a loan discharge:
You can browse student loan rates from real lenders in the table below. To see student loan refinancing offers tailored to your needs, be pre-qualified in minutes on Credible.
SEPTEMBER IS LIFE INSURANCE AWARENESS MONTH: ARE YOU ENOUGH COVERED?
Is Student Loan Refinancing Right For You?
Refinancing a private student loan can be an effective way to find student loan relief, avoid default, and save money over time.
According to data from Credible, creditworthy borrowers who refinanced a shorter-term student loan on Credible were able to save nearly $ 17,000 and pay off their college debt 41 months faster. Borrowers who refinanced a longer term loan reduced their payments by more than $ 250 without increasing the overall cost of the loan.
You can use Credible’s student loan refinance calculator to see how much you can save by refinancing at a lower rate.
However, refinancing a student loan is not necessarily for everyone. Borrowers with federal student loans risk losing federal protections such as income-tested repayment plans and administrative forbearance by refinancing into a private loan.
Still not sure if you should refinance your college debt? Contact an experienced loan officer at Credible to learn more about student loan refinancing.
ED INVERSE TRUMP ADMINISTRATION STUDENT LOANS POLICY LIMITING STATE AGENCIES
Have a finance-related question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.