Appeals Court Orders $23 Billion in Student Loan Forgiveness
An appeals court has ordered the Education Department to forgive over $23 billion in student loans for more than 170,000 borrowers who were misled by for-profit schools, expanding a 2019 settlement to potentially cover 450,000 borrowers. Additionally, federal student loan…
Tampa St. Petersburg, FL, August 5, 2026 —
An appeals court has directed the Education Department to forgive more than $23 billion in federal student loans for over 170,000 borrowers. This decision stems from claims that these individuals were misled by for-profit educational institutions.
The court’s order expands upon a 2019 settlement and could potentially extend relief to as many as 450,000 borrowers. The affected borrowers are those who allege they were defrauded by their schools. The specific details regarding the timeline for the forgiveness process and the criteria for borrower eligibility beyond the initial group of 170,000 were not provided.
In a separate development impacting federal student loan borrowers, a 1% interest rate reduction is set to take effect for those enrolled in automatic payment plans. This reduction will be applicable from July 1, 2024, through June 30, 2028. To be eligible for this rate reduction, borrowers must enroll in automatic payments by September 30, 2026. The total amount of savings for borrowers due to this interest rate reduction was not specified.
Story summarized from the original created by Scripps News Group on www.tampabay28.com, see more information here.
