These borrowers are eligible for Biden’s 2021 student loan forgiveness

BY Lance LambertSeptember 28, 2021, 11:18 PM
U.S. President Joe Biden delivers remarks in the White House, as seen in September 2021. (Photo by Anna Moneymaker/Getty Images)

Since the inauguration, the Biden-Harris administration has issued four waves of student loan forgiveness. These rounds—which cover less than 1% of the total $1.7 trillion student debt—can hardly be described as “mass” forgiveness that progressive lawmakers are seeking, however, they do mark a significant policy shift from past presidential administrations.

But who exactly is set to receive student loan forgiveness this year?

Advertisement

To provide clarity for borrowers, Fortune has created an overview of the rounds of student loan forgiveness announced this year.

Wiping out loans for 323,000 disabled borrowers

Earlier this year, the U.S. Department of Education announced it will cancel student loans held by disable borrowers. But it wasn’t until Aug. 19 when we found out how it will be implemented. Here’s how it’ll work: The Department of Education will automatically cancel $5.8 billion in student loans held by more than 323,000 borrowers who have a total and permanent disability (TPD).  

The agency will identify these borrowers by matching their loans to their disability records on file with the Social Security Administration. According to the Department of Education, the discharge will be effective sometime this fall.

“This change will go into effect with the Department’s next quarterly data match with SSA, which will occur in September,” the Department of Education writes on its website. “Borrowers will receive notices of their approval for a discharge in the weeks after the match and the Department expects that all discharges will occur by the end of the year.”

Three rounds of forgiveness covering nearly 200,000 defrauded students

Education Secretary Miguel Cardona, who was appointed by Biden, oversaw a round of forgiveness for defrauded and misled borrowers just weeks after he was confirmed by the U.S. Senate. That round, announced in March, wiped out student loan debt of former American Career Institute, Corinthian Colleges, or ITT Technical Institute students who had approved “borrower defense to repayment” claims. Those claims can only be filed by alumni of programs the federal government has determined used illegal practices. In all, that round covered more than 70,000 borrowers who owed a combined $1 billion.

This summer, the Department of Education announced a second round of forgiveness aimed at defrauded students, which wiped out student debt held by around 1,800 former students of Court Reporting Institute, Marinello Schools of Beauty, or Westwood College. Similar to ITT Tech and Corinthian Colleges, those schools were also determined to have used deceptive practices.

The fourth round of forgiveness, and third round aimed at “defrauded” students, came on Aug. 26. That’s when the Department of Education announced it would do another round for former students of ITT. While the initial round only included graduates of ITT, this round expanded it to former students who did not graduate. In total, this round wiped out $1.1 billion in loans held by 115,000 borrowers.

“For years, ITT hid its true financial state from borrowers while luring many of them into taking out private loans with misleading and unaffordable terms that may have caused borrowers to leave school,” Cardona wrote last month on the Department of Education’s website. The “action continues the Department’s efforts to improve and use its targeted loan relief authorities to deliver meaningful help to student borrowers.”

While “mass” student loan forgiveness looks unlikely in the short-term, industry insiders tell Fortune more small rounds like these by the U.S. Department of Education are very possible. However, at this time, it’s unclear who will be covered if future rounds of forgiveness are announced.

See how the schools you’re considering landed in Fortune’s rankings of the best executive, full-time, and online MBA programs.