Cancels $1 Billion in Student Loans

On Thursday, The U.S. Department of Education announced that it will streamline debt relief for millions of borrowers with claims that their secondary institution engaged in misconduct. Recalculating the formula made in the DeVos administration, Cardona and staff will rescind the formula for calculating partial relief and streamline an approach for granting full relief. This move will help approximately 72,000 borrowers will receive $1 billion in loan cancellation.

“Borrowers deserve a simplified and fair path to relief when they have been harmed by their institution’s misconduct,” said Secretary of Education Miguel Cardona. “A close review of these claims and the associated evidence showed these borrowers have been harmed and we will grant them a fresh start from their debt.”

Under the current provisions in federal law called “borrower defense to repayment” or “borrower defense” allow federal borrowers to seek cancellation of their William D. Ford Direct Loan (Direct Loan) Program loans if their institution engaged in certain misconduct. Beginning March 18, the Department will ensure that borrowers with approved borrower defense claims to date will have a streamlined path to receiving full loan discharges.

The details under this new regulations will include:

  • 100 percent discharge of borrowers’ related federal student loans.
  • Reimbursement of any amounts paid on the loans, where appropriate under the regulations.
  • Requests to credit bureaus to remove any related negative credit reporting. And,
  • Reinstatement of federal student aid eligibility, if applicable.

Under the Devos methodology approved in December 2019, under the DeVos administration, this new method will grant relief to borrowers who did not see a way out of the debt. Within the next several weeks, USDOE will begin applying this new approach today and affected borrowers will receive notices from the Department over the next several weeks with discharges following after that. For more information, visit

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