The U.S. Department of Education announced that 72,000 students would have their student loans erased under the Borrower Defense to Repayment program.
The relief will go to students who attended for-profit schools and were already approved by the Department of Education for Borrower Defense relief.
While the move amounts to roughly $1 billion in debt relief, it only applies to less than half of the 200,000 students that have filed claims.
Students will also receive refunds for payments already made, and negative marks on their credit report will be removed.
“Borrowers deserve a simplified and fair path to relief when they have been harmed by their institution’s misconduct,” Miguel Cardona, President Biden’s newly confirmed Education Secretary, said. “A close review of these claims and the associated evidence showed these borrowers have been harmed and we will grant them a fresh start from their debt.”
“Abandoning partial relief is a strong start for a narrow subset of borrowers,” Toby Merrill, Director of the Project on Predatory Student Lending, said in a statement. “But what we need from the Education Department is an overhaul of the current borrower defense process… The previous administration turned borrower defense into a total sham that was rigged to deny claims without any true consideration. The Biden-Harris administration must now address these failings or else perpetuate a system that is stacked against the very students they are supposed to protect.”
Under former President Donald Trump’s administration, the Department of Education rewrote the Borrowers Defense program rules, making it harder for students to receive relief from the program.