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

The Biden administration reached a deal 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 didn’t attend eligible colleges will have their applications for relief fast tracked under the deal.

Activists hold signs as they attend 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 stalled the borrower defense process, which is how people apply for relief if they believe a college they attended made false advertising claims.

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

“It will not only help secure billions of dollars in debt cancellation for defrauded students, but charts a borrower defense process that is fair, just, and efficient for future borrowers,” she said in a statement.

A hearing for a judge to give the final sign-off on 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 that it would cancel about $5.8 billion in debt for anyone who attended a Corinthian School.

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

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Biden has so far 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 who makes less than $150,000 annually, or $300,000 combined for married couples.

The Associated Press contributed to this report.

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