By Maria Carrasco, NASFAA Staff Reporter
With just a few days until the incoming Trump administration takes office, the Biden administration on Thursday announced its "final" approvals of student loan forgiveness for borrowers through the income-based repayment (IBR) plan and borrower defense to repayment.
Specifically, the Department of Education (ED) approved student loan forgiveness for 4,550 borrowers through the IBR plan, totaling $600 million in forgiveness. Additionally, ED approved forgiveness through borrower defense to repayment for 4,100 borrowers who attended DeVry University. ED did not clarify the total dollar amount for this forgiveness.
According to ED, the Biden administration has approved a total of $188.8 billion in student loan forgiveness for 5.3 million borrowers since taking office.
“Four years ago, President Biden made a promise to fix a broken student loan system,” said Education Secretary Miguel Cardona in a statement. “We rolled up our sleeves and, together, we fixed existing programs that had failed to deliver the relief they promised, took bold action on behalf of borrowers who had been cheated by their institutions, and brought financial breathing room to hardworking Americans—including public servants and borrowers with disabilities.”
Along with the student loan forgiveness announcement, ED noted that it completed the income-driven repayment (IDR) payment count adjustment, correcting eligible payment counts on borrowers’ accounts. However, ED noted some borrowers may see one or two additional months credited in the coming weeks. This initiative was part of the Biden administration’s efforts to fix “administrative failures” in the IDR program.
Additionally, ED has launched the ability for borrowers to track their IDR payment progress on StudentAid.gov. Through this tracker, borrowers can log in to their account and see their total IDR payment count, a month-by-month breakdown of progress, and an estimated date for the end of their IDR payment term.
ED also gave an update on Thursday regarding closed school discharges. Normally, ED wrote, a borrower qualifies for a closed school discharge if they did not complete their program and were either still enrolled when the school closed or left without graduating within 120 days before it closed.
However, ED has determined that several schools closed under “exceptional circumstances.” This determination warrants allowing borrowers who didn’t complete and were enrolled in the school more than 120 days prior to its closure to qualify for a closed school discharge. ED has directed Federal Student Aid (FSA) to make these borrowers aware of their eligibility and to allow automatic discharges for those affected by the outlined school closures. More details can be found on FSA’s website.
According to ED, these are the adjusted eligibility windows for borrowers who attended these closed schools with “exceptional circumstances”:
“To May 6, 2015, for all campuses owned at the time by the Career Education Corporation, which have since closed. That is the day CEC announced it would close or sell all campuses except for two brands. This affected the Art Institutes, Le Cordon Bleu, Brooks Institute, Missouri College, Briarcliffe College, and Sanford-Brown.”
“To October 17, 2017 for all campuses owned at that point by the Education Management Corporation, and that later closed. That is the day EDMC sold substantially all of its assets to Dream Center Educational Holdings. The decision affects borrowers who attended the Art Institutes, including the Miami International University of Art & Design, and Argosy University.”
“To December 16, 2016, for campuses owned by the Education Corporation of America (ECA) on that date that closed. ECA operated Virginia College, Brightwood College, EcoTech, and Golf Academies and started on the path to closure after its accreditation agency lost federal recognition and ECA could not obtain accreditation elsewhere.”
“To April 23, 2021, for Bay State College. That is the day this Massachusetts-based college began to face significant accreditation challenges, which eventually led to the school losing accreditation and closing in August 2023.”
Earlier this week, the Biden administration announced new approvals for student loan debt forgiveness for over 150,000 borrowers through borrower defense, Public Service Loan Forgiveness (PSLF), and total and permanent disabilities discharges. On Wednesday, ED also announced $4.5 billion in student loan forgiveness approvals for 261,000 borrowers who attended Ashford University.
Publication Date: 1/17/2025
Lee Ann T | 1/17/2025 4:17:25 PM
"Only the exceptional circumstances' should have been considered for relief." Yes, if the university committed fraud, I would consider that an exceptional circumstance, as I stated above.
David S | 1/17/2025 3:7:44 PM
So to clarify Lee Ann, you believe that if it's been established that a needy student borrowed to attend a school that willfully committed fraud against them (and in many cases, against all students they enrolled), then the borrower, as a defrauded consumer, should be fully responsible for repaying the loan? Would you as a consumer of any type of product or financial transaction and a victim of fraud be willing to assume that same responsibility?
And please explain why this should in any way be impacted by America's foreign policy, especially given that you say there's "no correlation." Then why bring it up?
Lee Ann T | 1/17/2025 2:35:15 PM
They borrowed, they should be made to pay the funds back. Only the 'exceptional circumstances' should have been considered for relief. $1.88 billion in loans forgiven and there is no correlation with the billions that Biden funneled to Ukraine, which was about $175 billion. I am very much excited about the next 4 years!
David S | 1/17/2025 9:43:29 AM
I will pre-emptively point out...this is the Biden administration administering the proper regulatory procedures in enforcing existing federal statute. Not arbitrary. Not a "handout."
My prediction, based on what we witnessed in the 4 years prior to the Biden administration; starting next week, these actions will no longer occur, based on a completely arbitrary decision by the incoming administration NOT to enforce the same laws. Borrowers legally entitled to relief will be denied once again.
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