Student Loan Debt to Be Erased for Tens of Thousands—Here's Who Is Eligible
The settlement covers borrowers who alleged that their schools misled them about things like job prospects or earnings potential.
More than 170,000 federal student loan borrowers who were defrauded by their schools will have their debts erased, following a federal appeals court ruling rejecting the Education Department's attempt to delay relief. The settlement covers borrowers who claimed their schools misled them about factors such as job prospects, earnings, accreditation, and program costs.
Financial literacy instructor Alex Beene states that the cancellation could free up money for essential expenses like housing. The ruling affects borrowers covered by Sweet v. McMahon, a class-action case over the Department of Education's handling of borrower-defense applications. The settlement includes full relief for discharged federal student loans and refunds of certain payments made to the Education Department.
Approximately $23 billion in relief is now available, affecting over 170,000 borrowers who followed the proper borrower defense process.
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