These borrowers are getting their student loans canceled

BY Lance LambertAugust 27, 2021, 02:00 am
U.S. Senate Majority Leader Sen. Chuck Schumer (D-NY) puts on a mask that reads “Cancel Student Debt” during a news briefing after a weekly Senate Democratic Policy Luncheon at the U.S. Capitol, as seen in July 2021. (Photo by Alex Wong—Getty Images)

For the second week in a row, the U.S. Department of Education has announced another wave of student loan forgiveness. On Thursday, the agency said it will wipe out loan balances totaling $1.1 billion for students who attended the now-defunct ITT Technical Institute. That follows the $5.8 billion in student loans canceled earlier this month.

These August announcements mark the third and fourth waves of student debt forgiveness issued since President Joe Biden took office. In total, the Department of Education says it has approved canceling $9.5 billion in student loan debt in 2021 for 563,000 borrowers.

When it comes to student debt forgiveness, the Biden administration has gone further than past administrations. But in the grand scheme of things, it’s still on the small side. Student loan borrowers owe a combined $1.7 trillion—yes, trillion—in student loan debt.

But who exactly is eligible for the four rounds of 2021 student loan forgiveness? To answer that question, we updated our student loan forgiveness guide.

First round: Announced on March 18

Soon after Education Secretary Miguel Cardona took over the helm of the U.S. Department of Education this year, the agency quickly announced it would wipe out student debt of borrowers who had approved “borrower defense to repayment” claims. Approved claims means the government determined the borrower attended a school that took part in deceptive or illegal practices. Those schools were Corinthian Colleges, ITT Technical Institute, and American Career Institute.

At the time, around 72,000 borrowers holding $1 billion in student loan debt had an approved claim. For more information on that round, go here.

Second round: Announced on July 19

This summer, the Department of Education announced it would approve borrower defense claims for 1,800 borrowers who attended the Court Reporting Institute, Westwood College, or Marinello Schools of Beauty. Those troubled programs were determined to have used deceptive practices. The Department of Education also announced it would wipe out $56 million in student loan debt held by the students.

For more information on eligibility of that round, go here.

Third round: Announced on August 19

Last week, the Department of Education announced it would discharge $5.8 billion in student loans held by over 323,000 borrowers who have a total and permanent disability (TPD).

Back in March, the Biden administration had announced it planned to forgive the debt of these borrowers. However, the latest announcement fleshes out who gets the forgiveness—and how it will be implemented.

The discharge of the $5.8 billion loan balances will be “automatic.” The Department of Education will access borrowers’ Social Security Administration records to identify those who are listed as disabled. Then, the agency will discharge the loans in September. For more details, go here.

Fourth round: Announced on August 26

More than 115,000 former students of ITT Technical Institute—which closed in 2016—learned on Thursday they would see their student loan balances discharged.

Earlier this year, the Department of Education issued forgiveness for many former ITT students. Not all former enrollees were covered, however. This latest round expands forgiveness to students who “did not complete their degree or credential and left ITT on or after March 31, 2008.”

According to the Department of Education, these former students attended the school during a period when ITT was misleading students into taking on “unaffordable private loans that were allegedly portrayed as grant aid.”

For more details on this round, go here.