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  • Writer's pictureRebecca Natow

ED to Strengthen Borrower Defense, Forgive More Debt

The U.S. Department of Education announced yesterday that "it will streamline debt relief determinations for borrowers with claims approved to date that their institution engaged in certain misconduct," estimating that more than $70,000 borrowers will receive a total of about $1 billion in loan cancelation. This is a move away from a Trump-era policy that made made it more difficult for loans to be forgiven under the Borrower Defense Rule.

From Inside Higher Education: "Previously, if a borrower’s claim that they were cheated was accepted, the ED determined loan relief based on a formula. If a borrower’s earnings after graduation were two standard deviations below the median for similar programs, the department granted the borrower full relief. If the borrower’s earnings were below the median, but not by two standard deviations, the department granted 25, 50 or 75 percent relief."

This action is in keeping with expectations that the Biden administration's policies would become more closely aligned with Obama-era policies regarding borrower defense to repayment.

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