Despite fights with Congress over canceling student loan debt, the Biden administration has quietly forgiven billions of dollars in loans over the years.
Through a lesser-known program for federal student loan borrowers, recipients can ask for loan forgiveness if a school misled them or broke state law, the Los Angeles Times reported. Since the formal application was introduced in 2015, more than 770,000 people have applied and nearly half a million were pending as of January.
The program itself stagnated under former President Trump but has ramped up under Biden’s watch.
Sara Diaz applied to have her $69,314 in loans forgiven after taking on the debt to attend the Art Institute of Pittsburgh, a for-profit school that closed in 2019. After 2.5 years, she received an email notifying her that her application had been approved.
“I almost couldn’t believe it,” she told the Times. “I reread it probably five times.”
The strategy to forgive the debt comes as Biden faces an uphill battle to cancel up to $20,000 in debt for some borrowers. The Department of Education has forgiven more than $18 billion for borrower defense applicants and for those whose schools closed before they finished their degrees.
The for-profit school industry has long been criticized for its recruiting practices and the quality of education its student receives.
Several large for-profit schools have closed in recent years amid pressure from the federal government and declining and investigations.
“Our job is to protect consumers,” said California Atty. Gen. Rob Bonta. “It’s not their fault that someone acted in bad faith and broke the law.”
Biden’s debt relief plan would cancel $10,000 in federal student loans for people making less than $125,000 and another $10,000 for people who received Pell grants for low-income students, according to an estimate from the Congressional Budget Office.
The fate of the plan remains uncertain. Opponents have said plans to cancel debt fail to address the underlying cause of the loan crisis: outrageous and skyrocketing college costs.
Average college tuition has more than doubled, adjusted for inflation, over the past 25 years.
