June 23, 2022
The Biden administration this week agreed to cancel about $6 billion in federal student debt for about 200,000 people who attended schools that they say defrauded them.
The Department of Education said it would wipe the debt for the borrowers in a proposed settlement filed in federal court Wednesday. The settlement addresses a class-action lawsuit filed in 2019 that has accused the Trump administration and Biden administration of delaying solutions for borrowers who filed for relief.
The proposed settlement will need to be approved by a judge, and a hearing has been scheduled for next month.
In addition to canceling debt, the agreement would refund borrowers for money they paid to the Department of Education and offer credit repair options.