🎓💰 How Millions of Borrowers Got $127 Billion in Student Loans Canceled
⬇️ Pidgin ⬇️ ⬇️ Black American Slang ⬇️ English
Di Biden administration fit nor fit knack off plenti people student loan wey dem dey owe wey na reach tens of millions of borrowers but dem still fit rub billions from education debt.
When di Supreme Court wipe President Biden $400 billion plan wey e wan take cancel up to $20,000 federal student loan debt for 43 million borrowers e be like say e go hard for pesin to get debt relief.
But waka reach millions of borrowers wey receive surprise notice say dia federal student loans wey dem dey owe don waka from government relief wey different from di one wey di Supreme Court yab. Biden administration don clean debt wey reach $127 billion for 3.6 million borrowers – di biggest wave of student debt cancellation wey dem don do since government begin back education loans more than 60 years ago.
Di koko na say taxpayers go still dey bear di cost of dat relief. Education Department na di largest lender for Americans wey dey borrow for higher education, and 43 million borrowers still dey owe government $1.6 trillion. Government dey see profit from di interest wey borrowers dey pay but loan wey people no fit pay and debt wey dem cancel dey balance am. E be like say e go dey run at a loss for most years.
Many of di programs wey di Biden administration dey use don dey for years, sometimes decades, but dem get wahala die, e dey hard for borrowers to dey follow dem waka. By making adjustments for di rules and temporarily changing some requirements, Education Department officials don helep borrowers quick quick. Here na four of di largest programs wey dem dey use eliminate loan debts – and how five borrowers tap from dem.
📚 Public Service Loan Forgiveness 📚
Debts wey dem don cancel: $51 billion for 715,000 borrowers
For 2007, Congress sign law wey dem wan use ginger more college graduates enta public service careers: people wey work for government agencies or nonprofit organizations fit get dia federal student loan balance disappear after dem don pay monthly for 10 years.
But di program complex rules come make am turn to quagmire wey reject 99 percent of applicants – and one try for 2018 wey dem try fix di wahala come turn to debacle. For 2021, Biden administration try again to knack student loan debt by bulldozing di program rules for temporarily and credit hundreds of thousands of borrowers for payments wey no suppose qualify for di program.
Dat one work finally. More than 230,000 people don cancel dia loans through waiver system wey end last year, and many people come get credit wey accelerate dia forgiveness date.
🎓 Income-Driven Repayment Adjustment 🎓
Debts wey dem don cancel: $42 billion for 855,000 borrowers
Education Department hire loan servicers make dem dey collect borrowers’ monthly payments and show dem way to follow for repayment. Watchdogs and auditors, wey include department inspector general, don dey blow whistle say di servicers dey do shoddy work and dem no dey really watch dem.
One wahala wey dem dey report na say servicers dey put borrowers loans into forbearance wey no suppose dey for years – as di interest just dey accumulate – and dem no dey guide borrowers make dem use income-driven options wey for no am wahala di total wey dem suppose pay.
Last year, government talk say dem wan ginger handle those problems by using giant eraser.
Income-driven payment plans na for make dem eliminate any remaining balance after certain period wey dem suppose dey pay, typically 20 years. Even for borrowers wey no enta di plan, Education Department decide to count any payment, for any amount, as one wey dey qualify – and dem add to dia list many months wey borrowers no pay at all because dem get long-term deferment or forbearance. Department decide say make dem apply those adjustments for all borrowers, no application needed.
📃 Borrower Defense to Repayment and Closed-School Discharge 📃
Debts wey dem don cancel: $22.5 billion for 1.3 million borrowers
For 2014, Corinthian Colleges – wey bin be one of di country largest for-profit college chains – come crumble. Dem follow am collapse ITT Technical Institutes, wey be another big school. Thousands of mid-degree students just dey waka for no reason and hundreds of thousands wey dey work pay loans wey dem suppose pay for better education but dem no get am.
Di palava ginger pipo begin make noise and take action: former students follow lawyers yan say make dem use di obscure federal student loan matter wey dem call “borrower defense to repayment.” Students wey schools deceive, typically by violating consumer protection law fit yan say make dem cancel dia loans.
Obama administration begin build system to take follow those requests but when Trump reach power dem come dey delay di matter. When Biden take power,
tens of thousands claims – some don dey delay for up to six years – still dey wait to dey answered, and over 130,000 others dem don yab am.
For 2022, Biden administration agree to make settlement wey dey cover 200,000 borrowers wey attend more than 150 schools. One of those wey follow am na Sally Olsen, 64, wey earn bachelor’s degree for business management for American InterContinental University, na for-profit school wey di owner pay $30 million make e settle fraud charges wey Federal Trade Commission bring.
Ms. Olsen start for 2004, but e be like say e no too dey feel di school and e still dey owe school wey no show better for di education wey dem talk for advert. Di school leave her with almost $110,000 in federal loans and tens of thousands more for private loans.
Ms. Olsen, wey dey work as admin assistant for insurance agency for Bloomington, Ill., finally finish pay di private loans through settlement but di federal loans been dey worry am. She decide say make she look for help, so she contact Veterans Education Success, wey be advocacy group. dia people help her file borrower defense claim for 2021.
Legal matter come delay di class-action settlement, but for May, Ms. Olsen finally hear say di $70,127 federal loan wey she owe don disappear.
“I think God finally hear my prayers, after all these years,” she talk.
🚑 Total and Permanent Disability 🚑
Debts wey dem don cancel: $11.7 billion for 513,000 borrowers
Borrowers wey disable for life fit make dem cancel dia federal student loans. Di process don dey hard like obstacle course wey dey require doctors’ notes – wey sometimes dem go reject based on say paperwork no follow – and many years of income-monitoring and other compliance matter wey dey tough. Many wey suppose get relief no wan bother apply.
But two government agencies don get data of pipo wey dey fully disabled: Social Security Administration and Department of Veterans Affairs. Dem come do data-matching with both agencies and dem remove some income documentation wahala, Education Department come add to number of borrowers wey dem don give relief.
Khen Reyes, 48, dem discharge am from Navy last year after many years of service. E give am post-traumatic stress disorder, anxiety and depression. Department of Veterans Affairs rate am 100 percent.
In 1997, Mr. Reyes join aircraft mechanics certification program for Sierra Academy of Aeronautics. More than two decades later, e still dey owe just over $25,000 – na defaulted debt and e stop am and im wife from fit obtain V.A. home loan. But e come carry im military discharge papers and disability papers, waka go make dem cancel im loan.
Last year wey end, Mr. Reyes wey dey live for Foster City, Calif., look for im loan servicer website and e see say e balance na $0.
“Other service members still dey waka dey look for how dem go do am like me,” e yan. “I want make dem know say, e dey okay make dem accept help wey dem dey entitled to. I no dey feel any shame say I use dis resource. If e get program wey fit help us, abeg, use am by any means.”
NOW IN BLACK AMERICAN SLANG
💰👩🎓 How Millions of Borrowers Got $127 Billion in Student Loans Canceled
The Biden administration might’ve hit a roadblock in the Supreme Court tryna wipe out debt for millions of peeps, but they still found a way to erase billions in education bills.
So, when the Supreme Court shut down Prez Biden’s $400 billion plan to wipe out up to $20,000 in fed student loans for 43 million folks, it seemed like game over for debt relief, right?
But then, outta the blue, millions of borrowers got hit with surprise notices sayin’ their fed student loans were gettin’ wiped clean thanks to some gov relief programs. The Biden administration managed to clear $127 billion in loans for 3.6 million peeps — that’s the biggest student debt wipeout since the gov started backin’ loans 60 years ago. 💸
But, let’s be real, somebody’s gotta foot the bill for this relief, and it’s comin’ from taxpayers. The Education Department is the big cheese when it comes to lendin’ dough for higher ed, and right now, 43 million borrowers owe Uncle Sam a hefty $1.6 trillion. The gov makes some bank from the interest on those loans, but when they go bust or get canceled, that profit goes up in smoke. And guess what? Most of the time, this whole system runs in the red. 📉
Now, let’s break down the four main programs that the Biden team used to wipe out these debts and see how some lucky peeps got saved.
📚 Public Service Loan Forgiveness 📚
Debts canceled: $51 billion for 715,000 borrowers
Back in 2007, Congress passed a law to lure more college grads into public service gigs. They said, “Yo, if you work for the gov or a nonprofit and pay your loans for 10 years, we’ll wipe out the rest of your fed student debt.” Sounds sweet, right? But it turned into a whole mess with complicated rules, rejectin’ 99% of folks who tried to get in on it. They tried fixin’ it in 2018, but that was a flop.
In 2021, the Biden admin had another go at it. They temporarily shook things up, scrapin’ the old rules and countin’ lots of payments that didn’t count before. That did the trick. More than 230,000 peeps had their loans forgiven through this waiver system, and lots more sped up their forgiveness.
Take Derik Screen, for example. Dude’s 41 and works as a business intel analyst at UNC Charlotte. To pay off his $39,000 M.B.A. debt from the University of Phoenix, he was strugglin’ with interest costs that kept makin’ his balance grow. Then, he heard about Biden’s temporary fix. He realized lots of his old payments could count, and he even got credit for the years he spent workin’ in the admissions office at his old school, Virginia Military Institute.
Consolidatin’ his loans, collectin’ all the paperwork, and gettin’ certifications from his old and new jobs was a hassle, but it paid off. In September, he got the letter sayin’ his $86,000 loan balance was gone. 💨
Derik said, “That relief, it’s amazin’, after so many years. And the idea that after 10 years, your debt can triple — I know for a lot of peeps, it’s just a number they’ll never be able to pay.” 🙌
🎓 Income-Driven Repayment Adjustment 🎓
Debts canceled: $42 billion for 855,000 borrowers
The Education Department hires loan servicers to collect folks’ monthly payments and help ’em figure out their repayment options. But these servicers have been messin’ up big time, puttin’ loans on hold without explainin’ why and not tellin’ borrowers ’bout income-driven options that could cut their payments.
Last year, the gov had enough and came up with a plan. They decided to give borrowers a major break. Income-driven payment plans are supposed to wipe out the rest of your balance after 20 years of repayin’. Even if you weren’t on these plans, the Education Department decided to count almost any payment, no matter how small, and even months when peeps couldn’t pay due to deferment or forbearance.
This meant hundreds of thousands of borrowers suddenly found out their loans hit the 20-year mark and were gone. First notification letters went out on July 14.
Chris White, a 40-year-old guy, didn’t believe it when he got an email from the Education Department sayin’ he was eligible for loan forgiveness. He thought it was too good to be true. But one day, he logged in to his loan servicer’s website, and guess what? His balance was $0.
This move saved Chris from $22,000 in debt he racked up for his electrical engineering degree from the University of Maine in 2007. He ditched the engineering gig and switched to bein’ a freight warehouse manager in Pembina, N.D.
Chuck Ertel-Hoy, a 72-year-old retired teacher, still owed $42,500 for a Ph.D. he got in 1997 from the University of Tennessee. He’d been tryin’ for years to get his loans wiped through the public service
loan forgiveness program but kept gettin’ tripped up by paperwork issues. Just when he was ’bout to start payin’ $300 a month from his retirement savings, he got an email in July sayin’ his loans were forgiven.
He said, “It relieves a lot of pressure. I’d thought, am I still gonna have to pay on these student loans for the rest of my life?” Now he can breathe easy. 😅
🤝 Borrower Defense to Repayment and Closed-School Discharge 🤝
Debts canceled: $22.5 billion for 1.3 million borrowers
Let’s flash back to 2014 when Corinthian Colleges, one of the big for-profit college chains, went belly-up. ITT Tech followed suit. Tons of students were left hangin’, and hundreds of thousands were stuck with loans for an education that didn’t deliver on what it promised.
That’s when the “borrower defense to repayment” rule came into play. It said if schools defrauded students, which happened a lot, the gov would forgive their loans. But it was slow and got even slower under Trump.
In 2022, the Biden admin agreed to a class-action claim coverin’ 200,000 borrowers from 150 schools. One of ’em is Sally Olsen, a 64-year-old who got a business management degree at American InterContinental University, a for-profit school that paid $30 million to settle fraud charges.
Sally paid off her private loans but was still haunted by her $110,000 fed loans. She reached out to Veterans Education Success, a group that helps vets with education issues. They helped her file a borrower defense claim in 2021.
It took some time, but in May, she finally got the news she’d been waitin’ for: Her $70,127 loan balance was history.
She said, “I think God finally heard my prayers, after all these years.” 🙏
🚑 Total and Permanent Disability 🚑
Debts canceled: $11.7 billion for 513,000 borrowers
If you’re permanently disabled, your fed student loans can be wiped out. But the process was a maze of red tape, needin’ doctor’s notes and lots of other paperwork. Lots of eligible peeps didn’t even bother.
But the gov had a plan. They teamed up with Social Security and the Department of Veterans Affairs, who already had data on disabled peeps. They made data matches and dropped some paperwork hassles. This move helped lots of borrowers get the relief they deserved.
Khen Reyes, 48, got discharged from the Navy last year after 40 years of service with PTSD, anxiety, and depression. He maxed out at 100 percent on the disability scale. In 1997, he got into an aircraft mechanics program at Sierra Academy of Aeronautics, and he still owed just over $25,000. This debt had kept him from gettin’ a V.A. home loan.
But with his military discharge papers and disability docs, he applied to get his loan forgiven. Late last year, he logged in and saw a $0 balance.
Khen said, “Other service members are in a similar boat as me. I want service members to know, this is about accepting something that you worked hard for. I don’t have any shame that I used this resource. If there’s a program that helps us, oh my God, by any means — use it.” 🙌
So, there you have it, folks. The Biden admin found some creative ways to wipe out a whole lotta student debt, and peeps are feelin’ blessed. 🙏💸💪
NOW IN ENGLISH
🎓💰 How Millions of Borrowers Got $127 Billion in Student Loans Canceled
The Biden administration may have been blocked from canceling debt for tens of millions of borrowers by the Supreme Court, but it has still managed to eliminate billions in education debt.
When the Supreme Court struck down President Biden’s $400 billion plan to forgive up to $20,000 in federal student loan debt for 43 million borrowers, the prospect of substantive debt relief appeared to vanish.
But then millions of borrowers received surprise notices that their federal student loans were being eliminated through other government relief programs. The Biden administration has wiped out loans totaling $127 billion for 3.6 million borrowers — the biggest wave of student debt cancellation since the government began backing educational loans more than 60 years ago.
The cost of that relief is ultimately borne by taxpayers. The Education Department is the largest lender for Americans who borrow for higher education, and 43 million borrowers currently owe the government $1.6 trillion. The government profits from the interest that borrowers pay, but loan defaults and canceled debts offset that. The system is projected to run at a loss in most years.
Many of the programs that the Biden administration is using have existed for years, sometimes decades, but were notoriously troubled, forcing borrowers to navigate complicated bureaucratic hurdles. By adjusting rules and temporarily waiving some requirements, Education Department officials have accelerated long-delayed relief. Here are the four largest programs being used to eliminate loan debts — and how five borrowers benefited from them.
📚 Public Service Loan Forgiveness 📚
Debts canceled: $51 billion for 715,000 borrowers
In 2007, Congress passed a law intended to entice more college graduates into public service careers: Those who worked for government agencies or nonprofit organizations would, after 10 years of monthly loan payments, have their remaining federal student loan balance eliminated.
But the program’s complex rules turned it into a quagmire that rejected 99 percent of applicants — and an effort in 2018 to apply patchwork fixes became another debacle. In 2021, the Biden administration tried again to cancel student loan debt by temporarily bulldozing the program’s rules and crediting hundreds of thousands of borrowers for previously ineligible payments.
That finally worked. More than 230,000 people had their loans eliminated through a waiver system that ended last year, and many more gained credits that sped up their forgiveness date.
🎓 Income-Driven Repayment Adjustment 🎓
Debts canceled: $42 billion for 855,000 borrowers
The Education Department hires loan servicers to collect borrowers’ monthly payments and help them navigate their repayment options. Watchdogs and auditors, including the department’s own inspector general, have repeatedly raised alarms about the servicers’ shoddy work and lax oversight.
One frequent complaint was that servicers would improperly place borrowers’ loans into forbearance, sometimes for years — during which interest kept accruing — and failed to guide borrowers toward income-driven options that could have sharply reduced their total payments.
Last year, the government announced a plan to address those problems by essentially wielding a giant eraser.
Income-driven payment plans are designed to eliminate any remaining balance after a set period of repayment, typically 20 years. Even for borrowers who never enrolled in those plans, the Education Department decided to count virtually any payment, for any amount, as a qualifying one — and it added to its tally many months in which borrowers made no payments at all because they had a long-term deferment or forbearance. The department chose to apply those adjustments automatically for all borrowers, no application needed.
📃 Borrower Defense to Repayment and Closed-School Discharge 📃
Debts canceled: $22.5 billion for 1.3 million borrowers
In 2014, Corinthian Colleges — once one of the country’s largest for-profit college chains — collapsed. It was quickly followed by ITT Technical Institutes, another industry giant. Tens of thousands of mid-degree students were left stranded, and hundreds of thousands more were paying off loans for an often substandard education that failed to deliver on the career growth and earning potential the schools had advertised.
The debacle catalyzed a wave of grass-roots activism: Former students teamed with crusading lawyers to request relief through an obscure federal student loan provision, known as “borrower defense to repayment.” Students whose schools defrauded them, typically by breaking consumer protection laws, could seek to have their loans forgiven.
The Obama administration began to build a system for handling those requests, but it ground to a halt during the Trump administration. When Mr. Biden assumed office, tens of thousands of claims — some that had been languishing for as long as six years — were pending, and over 130,000 others had been summarily rejected.
In 2022, the Biden administration agreed to settle a class-action claim that covered 200,000 borrowers who had attended more than 150 schools. One of them is Sally Olsen, 64, who earned a bachelor’s degree in business management at American InterContinental University, a for-profit school whose owner paid $30 million to settle fraud charges
brought by the Federal Trade Commission.
Ms. Olsen enrolled in 2004, but she was underwhelmed by her educational experiences there and overwhelmed by the debt it left her with: Nearly $110,000 in federal loans and tens of thousands more in private loans.
Ms. Olsen, an administrative assistant at an insurance agency in Bloomington, Ill., eventually paid off the private loans through a settlement, but the federal loans haunted her. Seeking help, Ms. Olsen — a former Marine — contacted Veterans Education Success, an advocacy group. Their representatives helped her file a borrower defense claim in 2021.
Legal challenges delayed the class-action settlement, but in May, Ms. Olsen finally got the news she had dreamed of: Her $70,127 federal loan balance had been eliminated.
“I think God finally heard my prayers, after all these years,” she said.
🚑 Total and Permanent Disability 🚑
Debts canceled: $11.7 billion for 513,000 borrowers
Borrowers who are permanently disabled are eligible to have their federal student loans eliminated. The process had long been a bureaucratic obstacle course, requiring doctors’ notes — which were often rejected, with little or no explanation, because of documentation errors — and years of income-monitoring and other compliance requirements. Many who would have qualified for relief never bothered to apply.
But two government agencies already had data on people who were fully disabled: the Social Security Administration and the Department of Veterans Affairs. By creating automatic data-matching programs with both agencies and eliminating some income documentation requirements, the Education Department significantly expanded the number of borrowers who gained relief.
Khen Reyes, 48, was medically discharged from the Navy last year after a military career that spanned four decades. It left him with post-traumatic stress disorder, anxiety and depression. The Department of Veterans Affairs determines the severity of service-related disabilities through a ratings scale; Mr. Reyes maxed out, at 100 percent.
In 1997, Mr. Reyes enrolled in an aircraft mechanics certification program at the Sierra Academy of Aeronautics. More than two decades later, he still owed just over $25,000 — a defaulted debt that had prevented his wife and him from obtaining a V.A. home loan. Armed with his military discharge papers and his disability documentation, he sought to have his loan eliminated.
Late last year, Mr. Reyes, who lives in Foster City, Calif., checked his loan servicer’s website and saw a $0 balance.
“Other service members are in a similar boat as me,” he said. “I want service members to know, this is about accepting something that you worked hard for. I don’t have any shame that I used this resource. If there’s a program that helps us, oh my God, by any means — use it.”
