Earlier in August, the U.S. Education Department under President Joe Biden announced it would cancel another $1.1 billion in student loan debt for about 115,000 borrowers who attended ITT Technical Institute, a now-defunct school.
This latest round of forgiveness brings the administration’s total to about $9.5 billion erased for about 563,000 borrowers, according to the Education Department.
While a win for many, it isn’t a sign that broad-based student debt forgiveness will necessarily come anytime soon, experts say.
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That’s because the debt canceled so far was done through a program called “borrower defense to repayment.” This targeted aid was created to protect people from being defrauded by schools engaging in misconduct or violating certain laws, such as falsely claiming guaranteed employment or incorrectly telling students that credits would transfer to other colleges.
It is separate from the Biden administration’s efforts to determine whether the president can legally cancel federal student loan debt through executive order.
“They are apples and oranges,” said Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, a nonprofit.
Playing catch up
Still, headlines about forgiven student loan debt have popped up in recent months, adding to confusion and excitement for borrowers. There’s been an uptick in loans canceled through borrower defense lately because the Biden administration is making up for lost time, according to Mayotte.
Updated rules for the program were set to go into effect under former President Donald Trump but were delayed. Then, the former administration released its own regulations in July 2020, months before Trump left office.
“They made it almost impossible for anyone to get relief and put on hold or stalled any applications in the pipeline,” said Mayotte.