Bianca Facchinei
Student debt activists buy off millions in loans, then cancel them
A collective requested permission to release the debt, which reportedly eliminated balances on at least 2,777 accounts.
LEARN MOREPosted: 7:49 p.m. EDT Oct 31, 2023
The battle over student loan forgiveness isn't over just yet. The Biden administration is working on another proposal, this time targeted to help specific borrowers after the Supreme Court shut down a much wider debt relief plan this past summer.
The new proposal revealed Monday aims to help certain borrowers, including those whose balances exceed what they originally owed or have loans that they've been paying off for 25 years or longer.
Borrowers who used loans to attend career-training programs that led to "unreasonable" debt or insufficient earnings, and borrowers who are eligible for other forms of forgiveness but didn't register would also be entitled to relief.
The Education Department is also considering adding a fifth category for "those who are experiencing financial hardship that the current student loan system does not currently adequately address."
In a statement, Education Secretary Miguel Cardona said: "President Biden and I are committed to helping borrowers who've been failed by our country's broken and unaffordable student loan system. We are fighting to ensure that student debt does not stand in the way of opportunity or prevent borrowers from realizing the benefits of their higher education."
This comes at the same time the department penalized a loan provider in Missouri — MOHELA — because it didn't send billing statements to borrowers on time, an error that led nearly a million of them to become delinquent on their loans.
According to the latest data from the Federal Reserve, the total student debt balance has now reached $1.7 trillion.
