Here’s Whose Student Debt Has Been Canceled Thus Far

September 1, 2021 · Updated on December 6, 2021

Here’s Whose Student Debt Has Been Canceled Thus Far
Higher Ed Policy Opinion & Analysis

  • The U.S. Department of Education recently announced more student debt cancellations.
  • The latest round cancels $1.1 billion for 115,000 borrowers who attended ITT Technical Institute.
  • Cancellation has been granted to defrauded students of for-profit schools and students with disabilities.

The U.S. Department of Education (ED) announced last week that it would cancel $1.1 billion of student debt for 115,000 borrowers. This round of cancellations will be granted to borrowers who attended the now-defunct, for-profit ITT Technical Institute.

The loans are being forgiven under the "closed school discharge" policy, which covers students who attended institutions that closed while they were enrolled or shortly after they had withdrawn.

The Biden administration previously canceled loans for former students of ITT Tech in June. New regulations extend the pool of students who qualify, now including those who left the school on or after March 31, 2008.

Since January, the Department of Education has forgiven $9.5 billion in debt for about 563,000 borrowers.

The institution has been accused of misleading students about its true financial state, encouraging them to take out extensive private loans, and exaggerating claims about its graduates' success.

Since January, the Department of Education has forgiven $9.5 billion in debt for about 563,000 borrowers. This round of cancellations may make some hopeful about the state of their own student debt amid increased calls from progressive Democrats in Congress to cancel $50,000 of debt per borrower. However, the possibility of broader cancellation is still uncertain.

Still, a noteworthy number of borrowers have had their debt erased this year, so here's whose student debt has been canceled thus far.

Students Defrauded by For-Profit Institutions

The ED began taking action in March to streamline the borrower defense relief process for students who had been defrauded by for-profit institutions. At the time, the agency anticipated that the process would impact approximately 72,000 borrowers and cancel $1 billion in debt. Borrowers who had previously been granted partial forgiveness had their debt fully erased.

In June, the administration cleared an additional 18,000 loan forgiveness claims, all from former students of ITT Tech. This round of cancellations cleared over $500 million in debt.

By July, the department announced that it was also approving over 1,800 loan forgiveness applications for borrowers who attended the for-profit institutions Westwood College, Marinello Schools of Beauty, and the Court Reporting Institute. It was the first time since 2017 that borrower defense claims were approved for individuals outside ITT Tech, Corinthian Colleges, and American Career Institute.

Students With Total and Permanent Disabilities

Individuals with total and permanent disabilities previously qualified for federal student loan forgiveness under law. However, those who were eligible had to apply in order to receive forgiveness.

In 2019, the ED removed the application requirement and began providing automatic relief to borrowers with total and permanent disabilities identified through the Department of Veterans Affairs.

In August, the Department of Education announced that it would grant automatic debt relief to individuals with total and permanent disabilities who are identified through the Social Security Administration. This new regulation impacts approximately 323,000 borrowers and will cancel $5.8 billion in student loan debt.


Feature Image: Paul Morigi / Stringer / Getty Images Entertainment