Student Loan Forgiveness 2023: Education Department Can Move Forward with $6 Billion in Student Loan Discharges

April 3, 2023 by  

A federal appeals court has cleared the way for the Biden administration to move forward with student loan forgiveness and other debt relief, as part of a settlement to resolve long-standing Borrower Defense to Repayment claims. The settlement, which was approved last fall, would provide $6 billion in student loan discharges to almost a quarter of a million borrowers who attended several dozen institutions, mainly for-profit schools, listed in the agreement.

The settlement agreement had been challenged by three schools listed in the agreement appendix – American National University, Everglades College, Inc., and Lincoln Educational Services – who sought to block the relief. They claimed that the agreement and the resolution process were unfair and that being listed in the settlement agreement was damaging to their reputations.

However, a federal district court ruled in February that the settlement relief could proceed, allowing the Biden administration to move forward with implementing the program. The Borrower Defense program provides federal student loan discharges and other debt relief for borrowers who were misled by their schools through false promises or misrepresentations about their programs.

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