Importantly, the relief will only apply to approximately 72,000 student loan borrowers who were already approved by the Department of Education for Borrower Defense relief. It does not apply to the tens of thousands of additional student loan borrowers who are awaiting a decision, or whose claims were previously denied by the Department.regarding the Borrower Defense to Repayment program.
To reverse these stricter regulations, the Biden administration could potentially enact new, more borrower-favorable rules in their place. However, this could be a long, drawn-out process, since new regulations must comply with the Administrative Procedures Act and include substantial public input. Secretary Cardona has not expressly indicated whether he will start the process of drafting new regulations.
Alternatively, Congress could pass legislation undoing the current rules and establishing a Borrower Defense regime that makes it easier for student loan borrowers to obtain relief. Congress passed such legislation last year on a bipartisan basis, but the bill was“Abandoning partial relief is a strong start for a narrow subset of borrowers,” said Toby Merrill, Director of the Project on Predatory Student Lending in a statement.
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