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Biden admin relaxes rules for student debt forgiveness

Published:Monday | October 31, 2022 | 5:03 PM
Education Secretary Miguel Cardona listens as President Joe Biden speaks about student loan debt forgiveness in the Roosevelt Room of the White House, August 24, 2022, in Washington. The Biden administration is moving forward with an overhaul of several student debt forgiveness programs, aiming to make it easier for borrowers to get relief if they are duped by their colleges or if they put in a decade of work as public servants. Cardona called it a “monumental step" that will make it faster and simpler to get debt relief. (AP Photo/Evan Vucci, File)

WASHINGTON (AP) — The Biden administration is moving forward with an overhaul of several student debt forgiveness programs, aiming to make it easier for borrowers to get relief if they are duped by their colleges or if they put in a decade of work as public servants.

The Education Department on Monday finalised a package of rules that it proposed earlier this year.

The new rules take hold in July and are separate from President Joe Biden's sweeping student debt forgiveness plan, which has been held up in court amid a legal challenge from Republican-led states.

Education Secretary Miguel Cardona called it a “monumental step” that will make it faster and simpler to get debt relief.

“The Biden administration is fixing a broken system and putting borrowers first,” Cardona told reporters on Monday.

Chief among the changes is a revamp of a programme known as borrower defence, which offers debt forgiveness to students whose colleges make false advertising claims or otherwise commit fraud.

The programme aims to help the victims of predatory for-profit colleges, but it has been bogged down by complex rules and political battles, resulting in a mounting backlog of applications.

The new policy clarifies that the Education Department can review claims from individual borrowers or it can grant forgiveness to huge swaths of students from the same college, if it has been found to have committed fraud.

The department can pursue such “group discharge” claims on its own or in response to requests from states or nonprofit legal groups.

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