BANKRUPTCY AND STUDENT DEBT RELIEF
Recent Updates in the Law
Recently, the Biden Administration passed a sweeping referendum allowing some students to apply for student loan debt relief. The provisions include the Department of Education will provide relief to Pell Grant borrowers of $20,000 while non-Pell Grant borrowers can expect to receive $10,000 of student loan debt cancellation. https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces-student-loan-relief-for-borrowers-who-need-it-most/.
The relief comes to individuals making less than $125,000 or $250,000 for married couples in annual income. Further, the Biden Administrations will make additional efforts to streamline the student loan system and make it more manageable for borrowers to repay their loans. If you want to apply for the debt relief, go to this website and fill out your application: https://studentaid.gov/manage-loans/forgiveness-cancellation/debt-relief-info.
Billions of dollars for relief
Additionally, the Biden Administration and the Department of Education have provided billions of dollars in student loan relief to borrowers who have been defrauded or misled by their educational institutions. For example, the Department of Education has provided over $1.1 Billion of student loan debt relief to borrowers who attended ITT Technical Institute.
The school was found liable in defrauding its students whereby the school, “engaged in widespread misrepresentations about the true state of its financial health and misled students into taking out unaffordable private loans that were allegedly portrayed as grant aid. ITT’s malfeasance drove its financial resources away from educating students in order to keep the school in business for years longer than it likely would otherwise have.” https://www.ed.gov/news/press-releases/extended-closed-school-discharge-will-provide-115k-borrowers-itt-technical-institute-more-11b-loan-forgiveness.
In even more recent news, the Department of Education has agreed to settle a pending lawsuit, Sweet vs. Cardona whereby over 150 higher learning institutions may have student loans provided to over 200,000 borrowers see relief totaling more than $6 Billion in student loans being discharged for these borrowers according to the settlement. The lawsuit has been given provisional approval and is set for more hearings in about a month. Assuming the lawsuit continues on its current track, these students will see their loans discharged and completely forgiven.