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Education Dept. promises big changes for 'broken' federal student loan system

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"We are committed to fixing a broken system," Education Secretary Miguel Cardona said in a statement Wednesday. Image by ShaunWilkinson/Shutterstock
"We are committed to fixing a broken system," Education Secretary Miguel Cardona said in a statement Wednesday. Image by ShaunWilkinson/Shutterstock

July 6 (UPI) -- President Joe Biden's administration announced on Wednesday that it will make sweeping changes to federal student loan programs and committed to resolving the "broken system," which includes making debt forgiveness more accessible.

The Education Department made the announcement and detailed major rules changes that would make it easier for some former students to obtain debt forgiveness.

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The department also promised to limit how much interest can be charged on outstanding loans.

The changes, which are authorized by the Higher Education Act, will alleviate student loan debt burdens for borrowers if their schools closed or they were deceived about financial assistance, the department said.

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Forgiveness would also be granted to students who are permanently disabled.

"We are committed to fixing a broken system," Education Secretary Miguel Cardona said in a statement Wednesday. "If a borrower qualifies for student loan relief, it shouldn't take mountains of paperwork or a law degree to obtain it.

Last month, the Education Department said it had reached an agreement to wipe away roughly $6 billion in federal student loan debt for about 200,000 borrowers. File Photo by Jim Ruymen/UPI
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"Student loan benefits also should not be so hard to get that borrowers never actually benefit from them."

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Some of the key changes include protections against aggressive and deceptive recruitment practices, reforms to allow debt cancellation after 10 years for government employees and changes to how interest accrues.

"The Biden-Harris Administration is determined to build a more accessible, affordable, and accountable student loan system," Cardona added. "These proposed regulations will protect borrowers and save them time, money, and frustration, and will hold their colleges responsible for wrongdoing."

For months, students and advocates have called on Biden to either forgive all federal student loans or make changes to allow former students to get out from under what can be years of repaying crippling debt.

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Last month, Cardona's department announced that it had reached an agreement to wipe away roughly $6 billion in federal student loan debt for 200,000 borrowers who'd claimed in a class-action suit that they were defrauded.

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President Joe Biden signs a condolence book in honor of deceased former Japanese Prime Minister Shinzo Abe at the Embassy of Japan on Friday. Photo by Chris Kleponis/UPI | License Photo

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