Biden administration cancels $6 billion in student loan debt for 200,000 borrowers

The Biden administration reached an agreement this week to cancel $6 billion in federal student loan debt for about 200,000 borrowers who attended mostly for-profit colleges.

The agreement covers more than 150 schools, including DeVry University, the University of Phoenix and the recently defunct ITT Technical Institute.

Another 68,000 borrowers who did not attend qualifying colleges will have their relief claims expedited under the agreement.

student loan forgiveness

Activists hold placards as they participate in a Student Loan Forgiveness rally on Pennsylvania Avenue and 17th Street near the White House on April 27, 2022 in Washington, DC. (Anna Moneymaker/Getty Images/Getty Images)

The lawsuit was originally filed in 2019 and argued that the Department of Education intentionally stopped the borrower’s defense process, which is how people seek relief if they believe a college they attended made false advertising claims.

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Eileen Connor, director of the Project on Predatory Student Lending, which represented the plaintiffs, celebrated the “important proposed settlement” on Thursday.

“Not only will this help secure billions of dollars in debt cancellation for defrauded students, it will also outline a borrower defense process that is fair, just and efficient for prospective borrowers,” she said in a statement.

A hearing for a judge to give final approval to the deal is scheduled for July 28.

President Biden

President Biden speaks in the East Room of the White House in Washington, Tuesday, April 5, 2022. (AP Photo/Carolyn Kaster/AP Newsroom)

The deal comes weeks after the Biden administration announced it would cancel about $5.8 billion in debt for anyone attending a Corinthian school.

Since the early days of the Biden administration, the progressive wing of the Democratic Party has been pushing the president to cancel $50,000 in student loan debt for each borrower.

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So far, Biden has resisted those calls, but the Washington Post reported last month that the White House is considering canceling up to $10,000 in student debt for every borrower earning less than $150,000 a year, or $300,000 combined for couples.

The Associated Press contributed to this report.

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