Biden administration cancels federal student debt of borrowers defrauded by their schools
CBSDec 30, 2021
The Facts
The US Dept. of Education has agreed to cancel $6B of student debt for 200K borrowers. The Sweet v. Cardona settlement will cancel debt for students who were defrauded or misled by their college or institution.
The class-action suit was brought by the Project on Predatory Lending and represents students who accused the department of mismanaging the Borrower Defense to Repayment program, which is designed to provide loan forgiveness.
The Spin
Republican narrative
Biden has given the Department of Education a reckless blank check to write off billions of dollars of debt without Congressional approval. A large percentage of debt is held by doctors, lawyers, and other well-paid professions. Large-scale debt forgiveness is unfair to the majority of American taxpayers.
Democratic narrative
Through the settling of this lawsuit, the Biden administration and the Department of Education have demonstrated their strong commitment to Americans overburdened by student debt. They reached an agreement with the plaintiffs that will provide relief to students while demonstrating a commitment to addressing the underlying structural issues involved with the student loan crisis.