Washington (CNN)The Biden administration has about 200,000 borrowers fooled by their colleges.
The administration previously approved a $ 25 billion loan forgiveness for 1.3 million borrowers. About 43 million Americans are in debt for federal student loans.
Many of the borrowers affected by the new contract have been waiting for years for the Ministry of Education to process their claims under a rule known as the borrower's defense against repayments. This allows borrowers who believe they have been fooled by the university to request federal student loan relief, often with higher employment rates or transfer of credits.
Seven of these borrowers filed a class action proceeding in 2019 over the processing of claims by the department. Under former Secretary of Education Betsy DeVos, the processing of the application was stalled. However, the Biden administration is cutting the unprocessed portion.
Another 64,000 borrowers who have already filed a borrower defense claim may also be eligible for debt relief under the proposed settlement agreement, based on how long the application is pending. And make a decision on the application within the deadline.
Both the plaintiff and the Ministry of Education stated they were satisfied with the agreement.
"This serious reconciliation proposal is for borrowers who have long fought hard for a fair resolution of their defense claims after being deceived by the school and ignored or rejected by the government. It will bring answers and certainty. " Irene Connor, director of the Harvard Law School's predatory student lending project on behalf of the borrower.
In a statement, Secretary of Education Miguel Cardona stated that the bailout "solves plaintiffs' allegations in a fair and impartial manner for all parties."
"Since day one, the Biden Harris administration has been working to address long-standing problems associated with the borrower's defense process," he added.
Targeted Debt Relief
The government has also temporarily expanded its eligibility for what is known as the Civil Service Loan Exemption Program. This cancels the remaining federal student loan debt after the government or non-profit workers have made eligible payments for 10 years. This expansion has so far canceled $ 6.8 billion for more than 113,000 borrowers.
Over $ 8.5 billion was automatically canceled for more than $ 400,000 borrowers who were permanently disabled and were previously eligible for debt relief but had not applied for it.
Biden is considering a broader student loan exemption
In the course of the campaign, Biden said he would forgive and support $ 10,000. White House officials say they are also considering setting income thresholds to exclude high-income borrowers from debt relief. The