You may be wondering if you qualify for a $ 500 million student loan cancellation.
Here’s what you need to know and what it means for your student loans.
If you’ve been following the latest student loan cancellation news, you know that President Joe Biden has now canceled $ 3 billion in student loans. That includes $ 500 million in student loan cancellations announced this week. Here’s how to qualify for the $ 500 million student loan cancellation (and what to do if you don’t):
- The defending the borrower against student loan repayment rule applies to you; and
- You attended the ITT Technical Institute (ITT), a for-profit college, and ITT misled or was at fault; and for example,
- Participating in the ITT had a negative impact or did not improve your employment prospects. This includes any alleged misrepresentation that ITT has made to you about your employment prospects and potential earnings after your participation; or
- ITT has misled you about your ability to transfer ITT credits to another college.
In total, approximately 18,000 student loan borrowers will be entitled to $ 500 million in total cancellation of their federal student loans as part of this particular student loan forgiveness by borrower’s defense against their student loan repayment. With this latest student loan cancellation, the Biden administration has now written off $ 1.5 billion in student loan debt under the borrower’s defense on repayment. Since there are 45 million student loan borrowers, however, this targeted student loan discount of 18,000 student loan borrowers may not apply to you. However, you can still apply for a student loan forgiveness as part of the borrower’s defense to repayment by meeting these requirements.
What is the borrower’s defense against repayment?
The borrower’s defense against repayment is a federal regulation that began under the Obama administration that allows you to have a student loan canceled if you have been misled or defrauded by your college or university. .
Which student loans can be canceled as part of the borrower’s defense to repayment?
The borrower’s defense applies to federal student loans, and more specifically to direct loans only.
Does the borrower’s defense against student loan repayment apply to FFELP loans or Perkins loans?
No, the borrower’s defense to repayment does not apply directly to Federal Family Education Loans (FFELP) or Perkins loans. This is no surprise because student loan cancellation does not apply to everyone. However, if you have FFELP or Perkins loans, you can consolidate them into a direct consolidation loan. Contact your student loan manager for more details. A direct consolidation loan is eligible for full student loan cancellation under the borrower’s defense to student loan repayment.
How much student loan forgiveness will I get?
If approved under the borrower’s defense to repayment, you could get a full cancellation of your student loan or a partial cancellation of your federal student loan. You can also get any negative credit reports removed from your credit report and, if applicable, your federal student aid eligibility reinstated.
How do I apply for a student loan termination?
You may be wondering: Has the student loan cancellation been reversed? It may sound like this since there have been no large-scale student loan cancellations. However, you can request the cancellation of a student loan by completing the Loan Repayment Defense Request. The application is available through both the US Department of Education and your student loans manager. The application takes approximately 30 minutes to complete. You will need your Federal Student Aid (FSA) ID, the name of your school and program of study, your enrollment dates, and any documents to support your application.
What are the conditions for canceling a student loan?
To obtain a student loan cancellation, you must prove:
- you borrowed federal student loans to attend college or university;
- you believe that your college or university has intentionally misled you or committed other wrongdoing;
- you have suffered specific financial loss as a result; and
- you can prove that your college or university violated a state law relating to your student loans or the educational services that were provided.
Understanding how to qualify for student loan cancellation is important. For example, here are some examples that might qualify you for a student loan cancellation: false promises from your college or university regarding the cost of your education, school accreditation, job prospects, ability to transfer credits or close your school while you were enrolled. . However, you cannot claim the borrower’s defense if, for example, you didn’t like school or college or didn’t get the job you wanted.
What if I have questions about the borrower’s defense?
If you have questions about borrower advocacy, contact the U.S. Department of Education’s borrower advocacy hotline at 1-855-279-6207. Representatives are available Monday through Friday, 8 a.m. to 8 p.m. EST.
If you don’t qualify for the borrower’s defense, there are still other great options for paying off your student loan. Here are some smart options to consider to save money: