President Joe Biden (Photo by Drew Angerer/Getty Images)
You may be wondering if you qualify for $500 million of student loan cancellation.
Here’s what you need to know — and what it means for your student loans.
If you’ve follow the latest news on student loan cancellation, then you know that President Joe Biden has now cancelled $3 billion of student loans. This includes $500 million of student loan forgiveness announced this week. Here’s how to qualify for the $500 million of student loan cancellation (and what to do if you don’t):
In total, approximately 18,000 student loan borrowers will qualify for $500 million of total student loan cancellation of their federal student loans under this particular student loan forgiveness per borrower defense to student loan repayment. With this latest student loan cancellation, the Biden administration has now cancelled $1.5 billion of student loan debt under borrower defense to repayment. Since there are 45 million student loan borrowers, however, this targeted student loan forgiveness of 18,000 student loan borrowers may not apply to you. However, you can still apply for student loan forgiveness under the borrower defense to repayment by meeting these requirements.
Borrower defense to repayment is a federal regulation that began under the Obama administration that allows you to get student loan cancellation if you were misled or defrauded by your college or university.
Borrower defense applies to federal student loans, and more specifically, Direct Loans only.
No, borrower defense to repayment doesn’t apply directly to FFELP Loans (Federal Family Education Loan Program) or Perkins Loans. This isn’t a surprise because student loan cancellation doesn’t apply to everyone. However, if you have FFELP or Perkins Loans, you can consolidate them into a Direct Consolidation Loan. Contact your student loan servicer for details. A Direct Consolidation Loan is eligible for full student loan cancellation under borrower defense to student loan repayment.
If approved under borrower defense to repayment, you could get full student loan cancellation or partial student loan cancellation of your federal student loans. You could also get any negative credit reporting removed from your credit report and, where applicable, a reinstatement of your eligibility for federal student aid.
You may be asking: Did student loan cancellation get cancelled? It may feel that way since there has been no wide-scale student loan cancellation. However, you can apply for student loan cancellation by completing the Application For Borrower Defense to Loan Repayment. The application is available both through the U.S. Department of Education and your student loan servicer. The application takes approximately 30 minutes to complete. You will need your Federal Student Aid (FSA) ID, your school name and program of study, your enrollment dates, and any documentation to support your claim.
To get student loan cancellation, you must prove:
It’s important to understand how to qualify for student loan cancellation. For example, some examples that could qualify you for student loan cancellation include: false promises from your college or university about the cost of your education, accreditation of the school, employment prospects, ability to transfer credits, or your school closed while you were enrolled. However, you can’t claim borrower defense if, for example, you didn’t like the school or faculty or didn’t get the job you wanted.
If you have questions about borrower defense, contact the U.S. Department of Education borrower defense hotline at 1-855-279-6207. Representatives are available Monday through Friday from 8 a.m. to 8 p.m. Eastern time.
If you don’t qualify for borrower defense, there are still other great options for student loan repayment. Here are some smart options to consider so you can save money: