The Biden administration is working to expand forgiveness of student loans of students who successfully claim they were defrauded by schools, a key component of its piecemeal approach to reducing educational debt, the Wall Street Journal reported. For-profit colleges worry that the administration could make it too easy to apply for and obtain loan forgiveness, potentially damaging the schools’ reputations and forcing some to close. President Biden’s Education Department has canceled, or discharged, around $2 billion in federal debt held by tens of thousands of former students of for-profit colleges using a regulation known as borrower defense to repayment, after it determined that the schools had deceived the students about their job prospects, broken state consumer-protection laws, or otherwise harmed them financially. Most of the schools have since shut down. The department promises more such discharges as it streamlines the process and works through a backlog of more than 150,000 claims for debt relief under the program, many of which have sat unaddressed for several years.
