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U.S. to cancel $6 billion in student loans for 200,000 defrauded borrowers

Economy Jun 23, 2022 02:31PM ET
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© Reuters. FILE PHOTO: A graduating student waits to cross the street in Cambridge, Massachusetts, U.S., June 7, 2019. REUTERS/Brian Snyder/File Photo

By Kanishka Singh

WASHINGTON (Reuters) -The United States will cancel $6 billion in student loans for 200,000 borrowers who claimed they were defrauded by their colleges, the administration of U.S. President Joe Biden said.

A settlement agreement between the borrowers and the U.S. Department of Education was filed with the U.S. District Court for the Northern District of California on Wednesday and must be approved by a federal judge.

Student debt cancellation has become a priority for many liberals and one that could shore up popularity with younger and more highly-educated voters, who lean Democratic, before November's midterm congressional elections.

About 43 million Americans have federal student loan debt, according to educationdata.org.

The loans of those borrowers will be fully eliminated, and any payments they made will be refunded, according to the court filing of the settlement deal.

The lawsuit from borrowers had accused the administrations of Biden and former President Donald Trump of illegally delaying for years any action on the applications that borrowers had filed with the Education Department seeking debt relief.

In a statement on Thursday, Education Secretary Miguel Cardona described the settlement as "fair and equitable for all parties" and said it will deliver "billions of dollars of automatic relief" to the 200,000 borrowers.

The Project on Predatory Student Lending, which represents students across the U.S. in fighting against student debt, described the settlement as "momentous."

The Biden administration had previously approved $25 billion in student debt forgiveness for about 1.3 million borrowers.

The administration had been reluctant to unilaterally make an unprecedented cancellation of college debt owned by the U.S. government. The president had instead earlier asked Congress to pass a bill forgiving debt that he could sign.

U.S. to cancel $6 billion in student loans for 200,000 defrauded borrowers
 

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Comments (8)
First Last
First Last Jun 23, 2022 1:43PM ET
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Carlos, this article is about frauds.  You're the 1st one to inject political bs here.
Ethel Basset
Ethel Basset Jun 23, 2022 1:38PM ET
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Total incompetence!
carlos guo
carlos guo Jun 23, 2022 1:31PM ET
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Benjamin literally threw a Karen tantrum below calling people snowflakes, I hope the irony is not lost on them. Benjamin is the perfect example of why you should never get a womens/gender studies degree.
First Last
First Last Jun 23, 2022 1:17PM ET
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So the taxpayers are on the hook for loans to attend Trump U.
Benjamin USA
Benjamin USA Jun 23, 2022 1:00PM ET
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This is sure to trigger the Karens and snowflakes even though it has no impact on them. Funny is if Trump had announced it I am 100% sure they would be grovelling over who can ***him over it.
carlos guo
carlos guo Jun 23, 2022 1:00PM ET
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I love that benjamin says the word "snowflake" in every post he makes because all that it does is make people think of leftists/liberals. it is a terms to describe them. I hope the irony that Benjamin is a Karen/snowflake is not lost on them.
nick cage
nick cage Jun 23, 2022 1:00PM ET
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You sound poorly educated
carlos guo
carlos guo Jun 23, 2022 12:48PM ET
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If they got womens/gender studies degrees, then I agree they were defrauded.
Benjamin USA
Benjamin USA Jun 23, 2022 12:48PM ET
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Exceedingly clever carlos, did you come up with that all by yourself?
carlos guo
carlos guo Jun 23, 2022 12:48PM ET
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Benjamin USA  No, I am not a democrat, I am able to use my own brain and not have to be told what to think by CNN.
Ferdinando Riboni
Ferdinando Riboni Jun 23, 2022 12:44PM ET
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oh good my degree is useless I want my 76k back.with interest
carlos guo
carlos guo Jun 23, 2022 12:44PM ET
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the same people who go around insulting people who go to community college and trade schools also go around complaining how useless their $150,000+ 4-year degree is. leftism is a mental disease, and all that college does nowadays is infect people's brains with leftism.
Benjamin USA
Benjamin USA Jun 23, 2022 12:44PM ET
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carlos guo sounds like you didnt read or understand the article yet are somehow triggered heavily by this event that has zero impact on you. Snowflake???
carlos guo
carlos guo Jun 23, 2022 12:44PM ET
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Benjamin USA  Nice projection benjamin, the guy who seems to be completely obsessed with responding to every simple comment that i make :) Sorry about your gender study degree.
Ethel Basset
Ethel Basset Jun 23, 2022 12:43PM ET
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Proof our government is totally incompetent! Why would you reward defaulters with loan forgiveness? DUMBEST GOVERNMENT EVER!
First Last
First Last Jun 23, 2022 12:43PM ET
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How are people who defaulted the students being rewarded?
First Last
First Last Jun 23, 2022 12:43PM ET
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People who defaulted the students, like Trump did, should be made responsible for paying off the loans.
 
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