Department of Education to cancel approx. $1 billion in student-loan debt

Department of Education has announced that it will forgive the student-loan debt of borrowers whose borrower-defense claims have already been approved. The announcement is here.

Under the law, students who attended schools that misled them or engaged in other misconduct in violation of certain state laws are eligible for borrower defense to loan repayment forgiveness, or "borrower defense." Essentially, the law allows defrauded students relief from federal student-loan debt when their schools close suddenly or engaged in illegal or deceptive practices.

The Obama administration had provided broad relief for defrauded students, such as those who attended Corinthian Colleges. Under Trump, however, Secretary of Education Betsy DeVos drastically cut back on the debt forgiveness for defrauded students. Instead, she applied a formula under which many students received little or no relief.

The Department of Education anticipates this change will ultimately help approximately 72,000 borrowers receive $1 billion in loan cancellation. 

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