Chipping Away at the Borrower-Defense Backlog

"The Department of Education is continuing to address its backlog of claims from borrowers who contend they shouldn't have to repay their student loans, announcing Friday that it has delivered another $55.6 million in relief to students of three closed institutions that made "widespread, substantial misrepresentations" about their programs," Inside Higher Ed reports. 

..."The Education Department is no longer processing borrower-defense claims as it did under the Trump administration, when the department calculated the amount of harm done to students by deceptive institutional practices and only provided relief proportionate to that harm. That approach has merit in theory but didn’t work in practice, adding to a backlog of claims, said Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators."

'What I see the Biden administration doing is coming in and acknowledging, ‘We are clearing the deck so these students have closure,’ Draeger said. 'And simply forgiving the debt becomes the fairest thing that we could do, because otherwise, they're just hanging out there in this sort of perpetual limbo.'

The most recent data available show the department still had over 107,000 borrower-defense applications to review as of the end of April. Draeger said that as long as there continues to be a backlog, he expects the Biden administration will continue to move quickly to resolve claims. Secretary of Education Miguel Cardona reiterated that Friday in a release."

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.


Publication Date: 7/12/2021

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