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More than $5.8 billion of student loans canceled by the Biden administration

The student debt crisis is a big issue in the United States, but the Biden administration is well on its way to repair the damage. Last week, more than 560,000 borrowers had their debt forgiven, and there could be room for more.

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Over 560,000 borrowers had their student debt forgiven last week.

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More than 560,000 student loans were cancelled. Source: Adobe Stock.

Last Wednesday, the U.S. Department of Education announced that it had canceled approximately $5.8 billion in student loans. More than 560,000 borrowers had their outstanding debt forgiven, which accounts for the biggest loan forgiveness action taken by the U.S. government to date. 

These cancellations apply to people who attended schools run by Corinthian Colleges. Once one of the biggest for-profit education companies, C.C. filed for bankruptcy in 2015. The company has faced many lawsuits since its founding, back in 1995. In 2013, Vice President Kamala Harris filed a lawsuit the college while she was still attorney general of California. According to Harris, Corinthian was guilty of deceptive and false advertising, among other allegations of the same nature. 

Miguel Cardona, the U.S. Secretary of Education prepared a statement to celebrate the action. In it, Cardona said that every student who’s ever felt deceived and driven into debt by C.C. can rest assured that the Biden-Harris administration will discharge their student loans. Borrowers who qualify for discharge will receive an automatic relief, so there’s no need to fill out an application. The department said these people are receiving a notification within the coming weeks. 

The news comes just as the Biden administration is considering a wider student loan forgiveness for millions of borrowers across the country. So far, about 1.3 million borrowers had their student loans forgiven, accumulating a total of $25 billion. Many economists and politicians believe the move is a step in the right direction in addressing the student debt crisis. However, millions of borrowers are still wondering when, or if, their student loans will ever be forgiven. 

Federal student loans pause will be extended 

student loans
A new extension for federal student loans is likely. Source: Adobe Stock.

According to a report from CNBC, White House officials are closing in on canceling about $10,000 of student loans for borrowers with an annual income of less than $150,000. However, the administration has yet to confirm such a strategy. Last April, the Department of Education extended  the freeze on student loan repayment through August 31. 

However, Michelle Dimino, Third Way’s senior education policy leader expects the repayment pause to be extended once more. Dimino believes the government should hold it off until the end of 2022, or at least until after the midterm elections take place. That is because a recent survey from Data for Progress and Rise stated that American voters are much less likely to vote in the midterms if the current administration doesn’t provide relief to student loan borrowers. 

Miguel Cardona and other officials have already made it clear that there is no issue in extending the pause for a bit longer. In April, Cardona said they will continue to monitor things. As of now, the end date remains August 31. But the government is comfortable with moving that date again if needed. 

If you are a student with bad credit and need a little hand in getting a loan, we can help. In the link below, you’ll find the best student loans for poor/average credit scores available. Read on for more information about them!

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