A college graduate calls his family on video to celebrate
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In early August, the U.S. Department of Education, led by President Joe Biden, announced it would cancel another $ 1.1 billion in loan debt for some 115,000 borrowers who attended the ITT Technical Institute. , a school already gone.
This latest round of pardon brings the administration’s total to about $ 9.5 billion cleared for about 563,000 borrowers, according to the Department of Education.
While it’s a victory for many, it’s not a sign that large-scale student debt forgiveness will necessarily come soon, experts say.
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This is because the debt canceled so far was done through a program called “borrower defense against amortization.” This specific aid was created to protect people who were not deceived by schools that misbehave or violate certain laws, such as falsely claiming a guaranteed job or incorrectly telling students that credits will be transferred to other schools.
It is different from the Biden administration’s efforts to determine whether the president can legally cancel the federal student loan debt through an executive order.
“They’re apples and oranges,” said Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, a nonprofit organization.
Playing the day
However, in recent months, headlines have appeared about the forgiven debt of student loans, which increases the confusion and excitement of borrowers. Lately, there has been an increase in loans canceled through the defense of borrowers because the Biden administration is making up for lost time, according to Mayotte.
The updated rules of the program were set to go into effect under former President Donald Trump, but were delayed. The former administration then released its own regulations in July 2020, months before Trump left office.
“They made it almost impossible for anyone to get relief and suspended or stopped any application in the pipeline,” Mayotte said.
That changed when Biden took office in 2021. He revived the program and quickly extended assistance to thousands of borrowers.
“There is a recovery that is happening right now on this front, and it will likely continue,” said David Bergeron, a higher education expert who served as deputy secretary for post-secondary education and deputy undersecretary for policy, planning and innovation. in the U.S. Department of Education during the Obama administration.
What will follow for the breadth of student loan forgiveness
Of course, the Biden administration continues to work to achieve a greater debt forgiveness of student loans that would help millions struggling with repayment.
The president is currently awaiting reports from the U.S. Department of Education and the U.S. Department of Justice setting out their views on the legality of forgiving student loan debt through executive actions.
“The government is working through the process to do it the right way,” said Will Sealy, co-founder and CEO of Summer, a company that helps borrowers simplify and save on student debt.
The biggest risk for borrowers is that they will throw themselves into this legal black hole.
David Bergeron
expert in higher education
If Biden forgives a portion of the student loan debt through enforcement actions, it is likely that it can be challenged in court and that, if not maintained, could create more problems for borrowers, according to Mayotte.
“I understand why you don’t move forward with an executive order until you’re sure that if you were in doubt, you would win,” he said of Biden’s hesitation to proceed with debt cancellation on his own.
While some lawmakers, such as Senate Majority Leader Chuck Schumer, DN.Y., and Sen. Elizabeth Warren, D-Mass., Have stated that the president can legally forgive student loan debt by executive order. , not all experts are so sure and want to minimize potential damage to borrowers.
“The biggest risk for borrowers is that they will throw themselves into that legal black hole,” Bergeron said.