![]() It’s unclear when qualified borrowers would receive loan discharges. Now that the settlement has been preliminarily approved, individual borrowers can expect to receive email or mail notifications from the Department of Education of their eligibility. It would also result in credit report adjustments. The rest of the class members would receive individual borrower defense decisions. If the settlement gets final approval, all discharges and refunds will be distributed to 75% of class members within one year. Those who submitted after June 22, 2022, could qualify as a “post-class applicant” until the settlement is approved - sometime in the fall.Those who submitted applications before June 22, 2022, and who didn’t receive a decision or were denied in or after December 2019, are included in the class of applicants eligible for discharge.That includes students who attended for-profit schools like DeVry University and the now-shuttered ITT Technical Institute. Since 2021, new reviews of claims have resulted in billions in discharges for millions of borrowers. $1 billion in closed school discharges.īillions for borrowers at for-profit schools.$9 billion to borrowers who are totally and permanently disabled. ![]() $8 billion under the Public Service Loan Forgiveness program.This includes the $8 billion in borrower defense discharges, as well as: Cardona settlement, federal data show that total federal student loan forgiveness under all programs had reached $26 billion and 1.5 million borrowers. Cardona, and it bumps up the total amount of borrower defense discharges to more than $14 billion.Įven before the Sweet v. The $6 billion settlement is the result of a class action lawsuit, Sweet v. The Biden administration has made those untouched borrower defense claims a priority, resulting in approximately $8 billion in discharges through the program since January 2021, federal data show. The program launched in 2015, but discharges slowed to a near-complete halt during the previous administration due to rules changes and inaction. But these discharges are only the latest in a series of efforts by the Department of Education to clear application backlogs and grant relief to borrowers whose schools defrauded them.īorrower defense offers loan discharge to borrowers whose schools - mostly for-profit - misrepresented such things as graduation and employment rates, financial aid, or even school classroom resources. It’s a whopper of a settlement and a big win for borrowers. ( NerdWallet) – More than 200,000 federal student loan borrowers who were misled by their schools are in line for $6 billion worth of debt relief as a result of a preliminary settlement approved by court order on Aug.
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