The President is nibbling around the edges on student loans….
Around 200,000 former students who attended schools that they said had defrauded them will have $6 billion in federal loans canceled under a sweeping settlement announced on Wednesday, the latest move by the Biden administration to address the student loan crisis by eliminating some debts.
Those who applied for relief — some as long as seven years ago — will have their loans wiped out if they attended one of more than 150 schools named in the class-action settlement, nearly all of which are for-profit colleges and vocational programs. The deal reverses 128,000 denial notices — which a federal judge called “disturbingly Kafkaesque” — that were sent to relief applicants during the Trump administration.
Many of the schools included in the settlement are out of business. They include large chains like the Art Institutes and other campuses run by the Dream Center, whose operations abruptly collapsed in 2019, and those owned by Career Education. The latter, at its peak, enrolled tens of thousands of students at more than 100 locations. The deal also includes a few colleges that are still operating, including the University of Phoenix, Grand Canyon University and DeVry University…
The deal, which requires approval by a federal judge, was greeted with cheers and relief by borrowers. “This is probably the sexiest thing I’ve seen in a long time!” one posted in a Facebook group. “My school listed as a bad actor and my debt will be wiped out.”
The agreement is a major step toward resolving a problem that had stretched across three presidential administrations: a glut of relief claims from students who attended for-profit schools that saddled them with large bills for a subpar education.
A state and federal crackdown a decade ago led to enforcement actions against some of the industry’s most notorious operators, pushing several prominent chains into bankruptcy. But even after the schools disappeared, the debts that their former students incurred remained….