Since his presidency, Biden made notorious decisions for canceling student debts. The news was announced on July 9th about another student loan forgiveness opportunity worth $55.6 million. This loan forgiveness amount can grant a debt-free life to more than 1,800 students. Here are the details:
Who Qualifies for $55.6 Million Loan Forgiveness?
Mainly, students whose for-profit schools defrauded them are eligible for this forgiveness opportunity. This program is also known as Borrower’s Defense to Repayment. As the Education Department Secretary, Miguel Cardona, mentions, this program and new forgiveness amount protect students from for-profit schools that took advantage of people in need.
If you studied in these schools, the forgiveness is specifically designed for your student loans:
- Westwood College
- Marinello Schools of Beauty
- Court Reporting Institute
This forgiveness action is also significant because it is the first time students of these schools get loan forgiveness specifically for their loans. Before, student loan forgiveness through Borrower’s Defense to Repayment was granted to other for-profits, such as Corinthian College, ITT Technical Institute, and American Career Institute.
Details of Forgiveness
As mentioned, $55.6 million forgiveness is for students misled by Westwood College, Court Reporting Institute, and Marinello Schools of Beauty. This forgiveness is granted through Borrower’s Defense against Repayment program, a federal student aid opportunity. Check subsequent sections for more information on the program.
1. Impact of Forgiveness on Westwood College Students
Out of $55.6 million forgiveness, the majority belongs to students of Westwood College. In total, $53 million will be addressed to the challenges of these students, which will help around 1,600 student debtors.
Westwood College students qualify for Borrower’s Defense to Repayment because the school is said to be misleading students about the transferability of credits. Additionally, the school lied about job replacement opportunities in Illinois after finishing the criminal justice program allegedly. Both of these fraudulent actions are included in Borrower’s Defense to Repayment’s scope.
2. Marinello Schools of Beauty
If you studied in Marinello Schools of Beauty, there is some chance that you can qualify for $2.2 million student loan forgiveness. But, unfortunately, only 200 borrowers qualify for forgiveness.
Another qualifying base for Borrower’s Defense program is the low quality of education. If the students do not get the education that they were promised, they can apply for this program to eliminate the student loan debt generated for educational purposes.
Marinello Schools of Beauty which closed in 2016, is claimed to mislead students about the quality of its program. Students noted that the school instructors failed to teach them even the basics. Besides, the school left students without any instructors for long periods, making it harder to pass licensing tests.
3. Court Reporting Institute
The lowest share of student loan forgiveness belongs to Court Reporting Institute students. In total, 18 borrowers would qualify for $340,000 loan forgiveness. This institute also closed due to the low quality of education and complex processes. It took students long years to finally finish the reporting program and graduate.
What if I did not Study in These Institutes?
These three schools are not the only ones that qualify for Borrower’s Defense to Repayment. Shortly before, Biden has granted another $500 million worth of student loan forgiveness to student debtors of ITT Technical Institute.
Unfortunately, this school also misrepresented the employment opportunities and misled students about educational matters, like the transferability of credits. Hence, 18000 students could qualify for $500 million loan forgiveness. Besides, students of Corinthian College and American Career Institute can also qualify for this program easily.
What are Other Forgiveness Opportunities by Biden?
Biden has not granted $50,000 loan forgiveness to each individual, that he is getting pressured by some Democrats. However, he took many actions that benefitted student loan borrowers. Since January, he canceled almost $3 billion student loan debt:
- The borrowers who applied for Borrower’s Rule and got partial forgiveness received full cancellation. Around $1 billion was distributed for this purpose. Around 72,000 students qualified for the program.
- Another $1.3 billion forgiveness was allocated to borrowers with total and permanent disabilities.
- Biden helped more than 1 million borrowers to get out of default status on their FFEL loans.
- Additionally, $500 million loan forgiveness was allocated for borrowers misled by the ITT Technical Institutions.
What is Borrower’s Defense to Repayment?
Borrower’s Defense to Repayment is a federal student aid program aiming to protect students who faced unfair treatment. In other words, if your school misled you about educational matters, you could demand cancellation of your student loan specifically requested for education in this school. The reasoning behind this program is that if the students do not get what they were promised, they should not continue repaying the loan.
Borrower’s Defense to Repayment only applies to Direct federal loans. So, unfortunately, if you have a Federal Family Education Loan (FFEL), Perkins, or private student loan, you will not qualify for forgiveness.
How Does the Loan Forgiveness Program Work?
This loan forgiveness opportunity does not require a service in return. Instead, what is essential is proving that the school misled you and, as a result, you made a wrong decision. In other words, if the school did not engage in unethical/illegal action, you would not have chosen to study there. For this purpose, it is necessary to make your arguments clear in the application. Besides, support your arguments with evidence to make a stronger case. For example, if the school officials gave you the wrong information, you can submit email communications. Alternatively, if the school used fraudulent marketing techniques, you can upload the brochure containing the details.