Almost 60,000 student loan borrowers are still waiting for $6 billion in loan forgiveness promised by the Education Department back in January.
In total, approximately 200,000 borrowers were assured debt forgiveness in the Sweet v. Cardona lawsuit.
The situation, where a large number of borrowers were deceived into taking loans at for-profit schools with the hope of securing well-paying jobs, resulted in the federal government agreeing to forgive all plaintiffs’ debt.
The borrowers were informed that all loan balances would be eliminated on January 28, along with their credit scores being restored and refunds being issued.
This pertained to individuals who enrolled in one of the 150 specified for-profit schools, along with a subset of 64,000 who sought borrower defense.
For a lot of people, the relief never arrived.
As per a letter from the Justice Department to the plaintiffs this month, a significant number of borrowers are still awaiting debt forgiveness.
The Education Department had initially reported that 95 percent of all eligible borrowers had received their relief, but the Justice Department later disclosed that the actual number was only 69 percent.
President Joe Biden recently expressed that when individuals with student debt receive assistance, they are able to invest in homes, businesses, and community involvement, ultimately boosting the economy.
“We are implementing substantial measures to offer student debt relief to as many borrowers as swiftly as we can.”
While the Sweet v. Cardona borrowers wait, many are experiencing financial challenges and finding it hard to cover essential expenses.
Many individuals have delayed significant investments such as buying houses while eagerly anticipating what will happen next.
Biden has repeatedly highlighted the $22.5 billion in student debt forgiveness during his reelection campaign, but the actual process of erasing the debt may prove to be more complex.
Some individuals combined their loans into one large payment, while others are managing multiple loan servicers.
For those who are still waiting, the wait has been quite lengthy. In June 2022, Biden approved the debt forgiveness, but it wasn’t until November that a federal judge finally approved the deal.
Regarding the delay in payments reaching many individuals, the federal government attributes the issue to student loan servicers causing delays in the process.
The Education Department shared that borrowers can expect a revised timeline for relief by March 1.
There are differing opinions regarding the relief for borrowers, including the Sweet v. Cardona case, where institutions may have provided inaccurate information to borrowers about the benefits of their education.
“This could potentially have significant long-term implications for higher education,” stated Fred Amrein, the CEO and co-founder of PayForED, in an interview with Newsweek.
“There are indeed marketing promises that the education system capitalizes on, but this is an educational endeavor. The student should be more accountable for their success.
Biden Eyes More Debt Forgiveness; Borrowers Adopt Wait-and-See
The Biden administration is currently working on approving additional student debt forgiveness under a hardship clause, while many other borrowers are adopting a wait-and-see attitude towards their loan payments.
Recently, Biden revealed that an additional 74,000 borrowers will receive $5 billion in relief, with 44,000 of them being public servants.
Many borrowers had already made over 20 years of payments on income-driven repayment plans.
Student loan payments resumed in October, but many individuals are finding it challenging to stay current due to high inflation and economic uncertainty.
A financial literacy instructor for the state of Tennessee informed Newsweek that the Biden Administration’s proactive decision to forgive student loans has had a ripple effect.
Many former students are currently in a state of anticipation, hoping for some form of forgiveness to be extended to them.
If you don’t have any guaranteed debt forgiveness promises coming up, it’s always best to pay off your debt each month.
“They should also take a proactive approach,” Beene stated. Being proactive in tackling your student debt is crucial. Even if there’s a chance of forgiveness, aiming to pay it off aggressively can lead to its eventual elimination.
