At this point, many student loan borrowers are painfully aware that President Biden's attempt to broadly forgive educational debt has been struck down by the Supreme Court. In fact, millions of borrowers who were able to pause their student loan payments during the pandemic are now gearing up to start sending checks to their loan servicers, once again.
But now, more than 2,300 student loan borrowers who attended Ashford University in San Diego may not have to worry about making payments on their debt. That's because the Biden Administration just wiped out $72 million of loans for students of that college who were victims of fraud.
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When colleges aren't truthful
The U.S. Department of Education is set up to protect student loan borrowers who are grossly misled or defrauded by the schools they attend. Meanwhile, the Department of Education found that Ashford University made substantial misrepresentations to students between 2009 and 2020. As a result, many students of the university had a hard time obtaining degrees or getting jobs after graduating.
Because of this, the Biden Administration is forgiving $72 million in loans for students who were negatively impacted by those false claims. Those eligible for relief should be notified in September.
It's not the first time this has happened
Students who are defrauded by the colleges they attend sometimes wind up being eligible for debt relief after signing their loans. Recently, the Biden Administration forgave $130 million in student loan debt for borrowers who attended CollegeAmerica in Colorado for a similar reason.
This isn't to say that as a borrower, you should hope that your college lies to you and makes false claims so that you have a chance at getting your loans forgiven. But what you should do is research colleges carefully before making the decision to attend. And then, if at some point you learn that you've been defrauded, make a stink about it.
You can start by contacting your loan servicer but should also make a point to submit a complaint to the U.S. Department of Education. You may also want to file a complaint with your school's accrediting agency. You may need to contact a local politician in your state to get pointed in the right direction to go that route.
The point, however, is that you shouldn't just resign yourself to having to repay your student loans if you were blatantly misled by the college you attended. Student loan borrowers have rights, and exercising yours could potentially mean getting relief from a pile of debt that isn't serving you well.
Meanwhile, if your student loans aren't eligible for forgiveness and you're worried about paying them, reach out to your loan servicer and discuss your options. You may be eligible for a new repayment plan that makes your debt much easier to manage. And if you're experiencing a financial hardship, you may even be eligible to pause payments on your student debt for a period of time so you don't wind up in default.
