In the ever-changing world of student loans, staying on top of current events and student loan rates is critical. Below are this week’s student loan trends that could affect your loans — and your wallet.
2 current trends within student loans for the week of June 21, 2021
1. Students who attended ITT Technical Institute will see full student loan forgiveness
The Department of Education announced the approval of 18,000 borrower defense to repayment claims for students who attended ITT Technical Institute, totaling $500 million.
The students will be granted full forgiveness after the now-defunct school was found to have engaged in fraudulent activity. The school misrepresented the likelihood of employment upon graduation and the potential salaries students would receive with a degree, the department stated.
ITT also misled students about their ability to transfer credits from 2007 through 2014. Students during this time were told that their course credits from ITT would transfer to other institutions, when in reality, many of the credits seldom transferred, according to the DOE.
“Our action today will give thousands of borrowers a fresh start and the relief they deserve after ITT repeatedly lied to them,” said Education Secretary Miguel Cardona in a statement. “Today’s action is part of the Biden-Harris Administration’s continued commitment to stand up for borrowers when their institutions take advantage of them.”
How this affects student loans
Borrower defense to repayment is a federal program that allows student borrowers to seek loan forgiveness if a college or university misled them, or engaged in other misconduct in violation of certain state laws. The claims for the students who attended ITT is the first approval of new borrower defense claims since January 2017.
Borrowers eligible for this round of student loan forgiveness will be receiving notices from the Department of Education in the coming weeks.
2. Americans over 50 carry the fastest-growing student loan debt, data shows
The Department of Education has released new student loan data reporting that Americans over the age of 50 carry the fastest-growing amount of total student loan debt in the country.
According to a Bloomberg report, 8.7 million Americans over 50 are in active repayment, and due to interest accrual, their balances have increased by about half since 2017. Before the COVID-19 student loan forbearance period, about 1 in 10 older Americans were unable to keep up with their student loan payments.
This high number of older Americans with rising student loan debt is due to several factors. Many borrowers reportedly either took out loans for their children to attend school or to pursue higher education later in life.
How this affects student loans
While much of the conversation about student loan debt concerns younger borrowers, Americans over 50 are underrepresented when it comes to student loan debt relief efforts.
Due to the break on federal student loan payments during the pandemic, many of these borrowers have had relief from payments. However, the relief period is set to expire on Oct. 31 of this year. During the 2021 Education Writers Association Conference, Cardona stated that he isn’t ruling out the possibility of an extension.
Whether you’re new to student loans or well into repayment, it’s wise to stay informed about how your student loan rates could change. As 2021 continues, more opportunities for cheaper loans or loan forgiveness could open up; keep an eye on the Bankrate student loans news hub for the latest trends.
- Best student loan rates
- What Biden’s annual budget means for the future of student loan forgiveness
- Federal student loan forgiveness update: See where the latest policies and proposals stand