Biden Cancels $415 Million in Student Loan Debt; Here's Who Can Qualify

President Joe Biden has canceled the student loan debt of over 16,000 borrowers amounting to $415 million, including a first-ever action of the U.S. Department of Education against a currently operating college involved in misconduct.

Biden and the Education Department approved the cancellation of the student loan debts of former students from several colleges, including DeVry University in Illinois, on Wednesday, February 16, 2022. These were former students who filed for borrower defense to loan repayment claims years ago on the basis that their school engaged in misleading claims.

Fox 13 reported that DeVry University defrauded about 1,800 former students by misrepresenting its job placement rates between 2008 to 2015. The school claimed that 90 percent of its graduates acquired jobs within their chosen field six months after graduating. However, the actual percentage for its job placement rates was 58 percent.

Donna Shaults, the spokesperson for DeVry University, said that the school's leadership has changed since 2015, and they have been kept up to date about the issues with the student loan debts. While the Education Department expects DeVry University to cover the cost of the canceled debts, Shaults said they disagree with the department's conclusion in its review of the borrower defense claims.

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Other Qualified Borrowers

Aside from approving the borrower defense claims of former students of DeVry University, Biden also canceled the student loan debts of ITT Technical Institute Nursing School with 130 borrowers, Minnesota School of Business/Globe University with 270 borrowers, Westwood College with 1,600 borrowers, and Corinthian Colleges and Marinello Schools of Beauty with a combined 11,900 borrowers. These institutions, however, have shut down operations, unlike DeVry University.

In a statement, Department of Education Secretary Miguel Cardona said that it was unfortunate these schools misled their former students into obtaining student loans yet could not deliver on their promise. The secretary added that his department is still reviewing pending borrower defense claims, which means more student loan debt forgiveness is expected in the coming months.

The Education Department has had a backlog of borrower defense claims after former secretary Betsy DeVos stopped the process during President Donald Trump's time, citing that this was bad policy. The debt relief policy was established under President Barack Obama.

Maine Lawmakers File Bill for Student Loan Debt Forgiveness

Meanwhile, lawmakers from Maine have introduced a bill that may consider a $40,000 student loan forgiveness for first-time home buyers. The proposal was filed before the committee on Tuesday, February 22, in the presence of the Maine State Housing Authority.

Former students living in Maine have one of the highest average student loan debts in the country at $33,000 per individual. Banks often refuse them when they apply for home lone because they are considered financial high risks.

Democratic Senate President Troy Jackson said that he would support the bill that will help young adults buy their first home and reduce their student loan debts over a period of five years. He said that Maine needs more residents to set their roots and become the tax base to help the state's economy.

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