The Department of Education agreed to wipe out $6 billion in student loan debt

August 8, 2022
Education
0 0

Image Source: https://www.businessinsider.com/

The Department of Education agreed on June 23 to cancel the student loan debt of about 200,000 borrowers, wiping out about $6 billion in total debt. More than 60,000 additional borrowers may also see their debt axed. Nearly all the schools involved are for-profit colleges or vocational programs.

The settlement stems from a 2019 class action lawsuit, Sweet v. Cardona, which argued many borrower defense claims for loan cancellation were being ignored by the Department of Education.

Borrower defense to loan repayment, often referred to as borrower defense for short, is a program from the federal government that allows you to discharge some or all of your student debt if your school defrauded you or violated specific state laws, like consumer protection statutes. You must prove you suffered specific financial harm as a result, such as not being employable as a result of your program.

How to know if you qualify

You don’t need to do anything to join the Sweet v. Cardona class action lawsuit. You are a member if you submitted a borrower defense application on or before June 22, 2022, and have not received a decision, or received a form denial in or after December 2019. There’s no cost to be a part of the class action lawsuit, and borrowers from any listed school qualify.

The class is made up of 264,000 people who have a pending borrower defense application as of June 22, 2022 (the date when the agreement was signed). About 200,000 attended one of the over 150 schools listed below and will get a full discharge of their loans, a refund of what they’ve paid, and credit repair. The Department of Education has found significant indicators of misconduct by these schools and has noted a high number of borrower defense applicants from these schools.

The other 64,000 in the class attended schools not on the list below. They will get individualized decisions on their borrower defense applications within rolling deadlines, depending on how long their applications have been pending.

How do you apply for borrower defense?

To apply for borrower defense, you’ll need your Federal Student Aid ID, school name and program of study, enrollment dates, and evidence to support why you believe you are eligible for borrower defense. You can apply online or by filling out a PDF and sending it in via email or standard mail. The application process will take roughly 30 minutes.

To get more information on the status of your application, you may call the Department of Education’s borrower defense hotline at 1-855-279-6207. You can speak with someone Monday through Friday from 8 a.m. to 8 p.m. ET.

There is a limited pool of borrowers who qualify for borrower defense, but it doesn’t hurt to apply and see whether you’re eligible if you believe your school defrauded you.

Story Source: https://www.businessinsider.com/personal-finance/student-debt-cancelled-sweet-cardona-settlement-2022-6

Leave a Reply

Your email address will not be published.