Words by Smiley Team
$1.6 trillion. That number is the student debt owed in the United States and is larger than all but 10 counties’ GDPs according to Worldometers. That debt can sometimes be upward of hundreds of thousands of dollars for individual borrowers, who count as many as 43 million according to educationdata.org, some of which follow them their entire lives. There have been calls to eliminate student debt from many sects of American life, some of which President Biden held on his campaign platform.
Now some of those calls have been answered, as the Department of Education agreed to a $6 billion settlement to cancel debt for 200,000 borrowers.
The settlement stems from a 2019 class-action lawsuit, Sweet v. Cardona, which argued many borrower defense claims for loan cancellation were being ignored by the Department of Education.
Borrower defense to loan repayment is a program from the federal government that allows you to discharge some or all of your student debt if your school defrauded you or violated specific state laws. To have a strong case you have to suffer some financial hardship, like not being employable due to the program in which you enrolled. There may be another 60,000 that qualify on top of the original 200,000 in the suit.
Those who qualify will have all student debt canceled, and an amendment to their credit if it was damaged by the circumstance.
“This momentous proposed settlement will deliver answers and certainty to borrowers who have fought long and hard for a fair resolution of their borrower defense claims after being cheated by their schools and ignored or even rejected by their government,” said Eileen Connor, director of the Project on Predatory Student Lending at Harvard Law School.
In a statement, Education Secretary Miguel Cardona described the settlement as “fair and equitable for all parties” and said it will deliver “billions of dollars of automatic relief” to the 200,000 borrowers.
DONATE: Taking a look at the opposite end of college, the non-profit Jumpstart helps prepare underprivileged kids to prepare for the first years of school.
SUPPORT: Help friends prepare for college. Maybe a friend is a first-generation college student and doesn’t know how to go through the process. Offer some insight and support if you have any.
