560,000 Borrowers Will Get Automatic Student Loan Forgiveness, But Others Can Still Apply For Relief

Last week, the Biden administration unveiled a massive campaign to erase billions of dollars in student loans for nearly 500,000 debtors.

The Education Department described the student loan forgiveness programme as one of the largest in its history.

However, while hundreds of thousands of borrowers will have their student debt balances automatically cancelled, the programme that underpins the administration's newest student loan cancellation is open to anybody.

The Biden administration's announcement last week focused on Borrower Defense to Repayment, a federal student debt cancellation programme.

This programme permits federal student loan borrowers to apply for loan forgiveness if their institution cheated or misled them regarding important aspects of their degree programme, such as admissions, credit transferability, or employment prospects.

The Education Department will erase nearly $6 billion in federal student loans for 560,000 former Corinthian Colleges students through Borrower Defense to Repayment.

Corinthian was a notorious nationwide for-profit college chain that went bankrupt in 2015 as a result of many federal and state probes into its operations.

Lawsuits filed against the colleges, including one filed by Kamala Harris as California Attorney General, charged that Corinthian willfully exaggerated job placement rates and participated in misleading advertising.

Corinthian was later found to have misrepresented students' ability to transfer credits to other universities by the federal authorities. Former students were left with piles of debt and meaningless degrees after Corinthian failed in 2015. (or no degrees at all, in some cases).

Dozens of these students staged a debt strike in 2015 to put pressure on the federal government to cancel their school debts, and their efforts resulted in the creation of a formal Borrower Defense application procedure.

However, the Borrower Defense programme has been plagued by political, bureaucratic, and legal issues ever since. The program's regulations have been modified multiple times. Tens of thousands of applications are still pending.