DOE to cancel $6B in student loan debt for 200,000 borrowers in fraud settlement, but left wants more

President Biden’s Department of Education has decided to forgive $6 billion in federal student loan debt to approximately 200,000 borrowers who claim they were defrauded by mostly for-profit colleges.

The decision applies to over 150 schools, including DeVry University, the University of Phoenix, and the now-defunct ITT Technical Institute, according to Fox Business. It’s being asserted that the colleges unrealistically promised attendees they would get a job and many didn’t.

Another 68,000 student loan recipients who did not attend eligible colleges will have their applications for forgiveness fast-tracked under the deal.

Not only are the student loans being canceled, but borrowers are also being refunded the money they paid to the Department of Education and they are being offered credit repair options.

This particular lawsuit began in 2019. It alleged that the Department of Education intentionally stalled the borrower defense process, a method utilized by those who believe a college they attended made false advertising claims.

According to USA Today, the Department of Education said in the proposed settlement it determined that attendance at the schools “justifies presumptive relief, for purposes of this settlement, based on strong indicia regarding substantial misconduct by listed schools, whether credibly alleged or in some instances proven, and the high rate of class members with applications related to the listed schools.”

Education Secretary Miguel Cardona noted in a statement on Wednesday, “We are pleased to have worked with plaintiffs to reach an agreement that will deliver billions of dollars of automatic relief to approximately 200,000 borrowers and that we believe will resolve plaintiffs’ claims in a manner that is fair and equitable for all parties.”

The “momentous proposed settlement” was celebrated on Thursday by Eileen Connor, the director of the Project on Predatory Student Lending. They represented the plaintiffs in the case.

“It will not only help secure billions of dollars in debt cancellation for defrauded students, but charts a borrower defense process that is fair, just, and efficient for future borrowers,” she said in a social-justice-sounding statement.

A hearing is scheduled for July 28 where it is expected a judge will give the final nod to the deal.

This deal comes on the heels of the Biden administration forgiving approximately $5.8 billion in debt for anyone who attended a Corinthian College, according to Fox Business.

Progressive Democrats are pushing for total student loan forgiveness despite the fact that it would explode inflation and implode the economy.

Biden has seemingly dragged his feet in regards to those demands but The Washington Post reported in May that the White House is considering canceling up to $10,000 in student debt for every borrower who makes less than $150,000 annually, or $300,000 combined for married couples.

Many Americans who have paid off their student loans wonder why they even bothered. They are furious at the prospect of having to pay off others’ loans:

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