Some students in Louisiana and across the country will find relief from their student loan debt after the federal Department of Education announced that it is cancelling $150 million in student loans. Secretary of Education Betsy DeVos opposed the 2016 regulations that sought to cancel the loans, which were taken out by students who attended schools that had made false promises to students or later closed. In many cases, these loans were taken out to attend for-profit institutions. Despite DeVos' opposition, a federal judge previously ruled that attempts to block the regulations were illegal.
The Education Department said that 15,000 borrowers had already been identified who were eligible for an automatic discharged on the basis of their schools closing or misrepresenting their programs. Over half of these loans, $80 million, are related to Corinthian Colleges. This chain of for-profit institutions closed all of its schools in 2015, leaving many students in thousands of dollars of debt without the opportunity to complete their educations.
The department also said that some of the debt relief may happen over a lengthy period of over 90 days. In some cases, only some of a student's loans will be forgiven.
Student loans can be some of the most significant forms of debt that many people face and also some of the more challenging to address through debt relief programs. In some cases, such as students who were misled into for-profit programs, there may be a mechanism to pursue for relief. In other cases, it may be possible for people to seek relief from other forms of debt even if their student loans are excluded from bankruptcy, especially if they are also facing mounting credit card debts. A bankruptcy lawyer may provide advice to people struggling with debt about steps that they can take to move toward a new financial future.
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