Betsy DeVos must testify why 160,000 people were turned down for student loan forgiveness

In the latest student loan cancellation news, Betsy DeVos must explain why 160,000 student borrowers were rejected for forgiveness of student loan.

Here’s what you need to know – and what it means for your student loans.

Student loans

DeVos, the former US Secretary of Education to President Donald Trump, is due to testify in federal court on why so many student loan borrowers have been turned down for student loan forgiveness. As the first reported through PoliticoJudge William Alsup wrote that “exceptional circumstances” justify DeVos appearing for a three-hour deposition, even though DeVos and the Biden administration have opposed the effort. According to the lawsuit, DeVos allegedly had personal involvement in the suspension of student loan forgiveness for defrauded student loan borrowers for 18 months and then denied their student loan forgiveness requests with little or no explanation. The judge wrote that he wanted to understand DeVos’ justification for such actions.

About 160,000 student loan borrowers have filed a federal lawsuit claiming that they have been wrongly denied student loan forgiveness by the Department of Education. (The court ruling comes at a time when federal student loan borrowers are expected to get $ 90 billion in student loan forgiveness until September 30, 2021 due to the Covid-19 pandemic). The student loan borrowers in this lawsuit are seeking student loan cancellation under the borrower’s defense until repayment, which allows student loan borrowers to obtain student loan cancellation if they have been defrauded. by their school or their closed school, for example. During his tenure, DeVos and the education department were sued on several occasions for forgiveness of student loans. Among the allegations:

  • 130,000 student loan cancellation requests were refused during DeVos’ last year in office (compared to 9,000 refusals during the previous five years);
  • The Department of Education sought to process 5,000 student loan forgiveness requests per week;
  • Examiners from the Department of Education often reviewed and made a decision on a student loan cancellation request in 12 minutes or less;
  • Reviewers who processed student loan cancellation requests faster received bonuses, while slower reviewers were fired;
  • 91,000 student loan cancellation requests were rejected with little or no explanation;
  • 95% of student loan borrowers who requested student loan cancellation were turned down;
  • Most, if not all, of the borrowers whose applications were approved got student loan cancellations solely because of the Obama administration’s past student loan forgiveness rules.


DeVos opposes cancellation of student loans

As secretary of education, DeVos has mostly opposed the cancellation of student loans and has also opposed the large-scale cancellation of student loans for student borrowers. Why? DeVos said she wanted to strike a balance between the needs and interests of taxpayers and student loan borrowers. DeVos claimed defending borrowers against repayment rules, put in place under the Obama administration, was costing taxpayers billions of dollars.

Student loan forgiveness: the DeVos plan

  • Under its revised rules for defending the borrower against repayment, DeVos said it would save taxpayers $ 11 billion over 10 years.
  • DeVos demanded from student loan borrowers who sought to demand the borrower’s defense a student loan cancellation request (rather than making it automatic).
  • DeVos also included a three-year limitation period on student loan cancellation for borrowers to prove they have suffered financial harm.

Biden cancels $ 2.3 billion in student loans

President Joe Biden wants to cancel student loans in three ways. Biden has acted aggressively to cancel student loans, including defending the borrower until repayment. For example, Biden has canceled at least $ 2.3 billion in student loans since becoming president. (You can find out here if you are eligible for this student loan cancellation). First, Biden canceled $ 1 billion in student loans for 72,000 student borrowers, and second, he canceled an additional $ 1.3 billion in student loans for 41,000 totally and permanently disabled borrowers. America reacted in different ways to the cancellation of Biden’s student loan. That said, the $ 1 billion student loan cancellation specifically provided relief on student loans for student borrowers who obtained partial student loan cancellation under the Trump administration. Biden canceled those 72,000 student loans due to the borrower’s defense against repayment. Biden’s efforts to cancel student loans for specific groups of student borrowers are examples of what could be many changes in student loans in the years to come. However, there are at least 5 signs that Biden won’t be doing a full-scale student loan cancellation.

If you have student loans, you have several options to save money and pay off your student loans faster. Here are some potential options, all at no cost:


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