The Biden administration is forgiving over $6 billion in student debt for former students of The Art Institutes. The schools misled students about job prospects and salaries. This automatic relief affects 317,000 borrowers who enrolled between 2004 and 2017. The schools falsified data, including using Serena Williams' income to inflate salary expectations.
Borrowers awaiting student loan forgiveness have until April 30th to request loan consolidation, which merges federal loans into one. This could accelerate forgiveness, as you'll receive credit for all payments since your first loan, regardless of its disbursement date. However, remember that consolidation may reset the forgiveness timeline, so consult an expert before proceeding.
President Biden has proposed making community college tuition-free nationwide, believing it's a better way to tackle college affordability than student loan forgiveness. While a federal plan isn't underway yet, 35 states have implemented programs to cover remaining tuition after financial aid. New Mexico's Opportunity Scholarship stands out for extending benefits to adult learners and immigrants, and has seen a significant increase in college enrollment since its launch.
The Biden administration's updated bankruptcy policy makes it easier for borrowers to discharge student loan debt. Borrowers can now apply for a discharge by completing a form outlining their financial hardships. Although bankruptcy can be beneficial for individuals in extreme financial distress, most should explore other options like income-based repayment plans and loan forgiveness programs. The government may also announce a revised student debt forgiveness package soon, so waiting to see what relief is available is advisable.
