Biden administration to cancel $6 billion of student debt for defrauded borrowers
The Biden administration said Thursday that it is canceling $6 billion in federal loans for roughly 200,000 borrowers who claim they were defrauded by their schools.
Why it matters: The announcement comes as the Education Department has made moves in recent months to provide defrauded borrowers with debt relief and as the Biden administration weighs broader plans to cancel student debt.
- Secretary of Education Miguel Cardona said Thursday that the agreement "will resolve plaintiffs’ claims in a manner that is fair and equitable for all parties."
Driving the news: The administration will cancel loans for students who attended one of more than 150 schools, many of which are for-profit and vocational programs and have gone out of business, the New York Times reports.
- The department said that the former students should receive relief due to "strong indicia regarding substantial misconducted by the listed schools, whether credibly alleged or in some instances proven, and the high rate of class members with applications related to the listed schools."
- The agreement calls for automatic relief for the approximately 200,000 former students, according to the court filing.