President Biden waives off $500 million in student loans for victims of a for-profit school scam

The Ministry of Education is writing off $500 million in student loan debt for 18,000 former ITT Tech students defrauded by the now-defunct for-profit university. This is another step taken by the Biden administration to resolve the backlog of more than 100,000 applications. 

That is what Trump left behind. The Ministry of Education said on Wednesday that ITT Tech closed in 2017 after the government withdrew its federal funds, misleading students in terms of their expected income after graduation and their ability to transfer credits.

The Biden administration stated that it would write off the $1 billion student loan debt of approximately 73,000 defrauded students who were deemed eligible for relief under the leadership of the former Minister of Education Betsy Devos, but only received partial loan relief after she changed the cancellation calculation. This policy allows students who are disappointed with the university to seek debt relief. 

During the Obama administration, when large for-profit universities such as Collins and ITT Tech closed, the forgiveness process was simplified. Other schools will not accept her credits, and she is also afraid of debt to obtain another degree. Instead, her husband decided to join the army again, while she stayed at home to take care of her daughter.

Mahler is cautiously optimistic about the department’s announcement. “I have been waiting for many years, so I won’t believe it is true until I receive an official letter,” he told CNN. De Vos made it clear that he considered the rule to be a “bad policy”, allowing taxpayers to bear the cost of debt relief without adequate protection and modified its scope.

DeVos’ comments put the rule in a state of uncertainty throughout the Trump administration. In about 15 months from 2018 to 2019, no applications were processed, and the total number of outstanding applications increased by one percentage point to more than 200,000. 

Since then, the Ministry of Education, under the leadership of Minister of Education Miguel Cardona, has reversed the DeVos changes. “Many of these borrowers have been waiting for a long time,” Cardona said in a statement. Some Democrats are pushing for extensive debt relief, and Biden’s efforts in student loan debt are not enough for some people,” Cardona said in a statement. Democratic leaders, including the Democratic majority leader.

Senate Chuck Schumer and Massachusetts Senator Elizabeth Warren called for a total cancellation of $50,000 per borrower. Biden has withstood the pressure so far but said he will support Congress’s cancellation of $10,000 per borrower. Federal Student Loans The pandemic-related suspension of Biden’s extended payment period earlier this year will last until October. 

Biden also ordered Cardona to write a memorandum regarding the cancellation of the debt by the President’s legal authorities. The administrative action for the broad exemption of federal student loans will be Unprecedented, but the memo from the advocate came from the Harvard Legal Services Center and its student predatory loan program.

The two said that the Department of Education has the right to do so. Biden did not include a student. His proposed 1.8 trillion US family debt cancellation clause in the plan calls for free community colleges and expanded Pell grants for low-income college students. Student loan advocates say that Biden’s measures to help victims of for-profit college fraud are a good first step, but Management can act faster to resolve the backlog of borrower defense claims.

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