On Monday, the Obama administration released new guidelines for the forgiveness of specific student loans. This program would forgive student loan debt incurred by those who can prove they were the victims of scams perpetrated by for-profit colleges that used fraudulent or illegal methods to convince the student to enroll. While there are federal laws already in place for this, the application process is difficult, plus few people know the program even exists. These guidelines would make it easier to apply for this type of forgiveness, but they are still under consideration. If finalized, the new program would not go into effect until July 2017.
Under this proposal, students would be able to seek debt forgiveness up to six years following their discovery of the school's wrongdoing, an increase from the current two-year limit.
However, applicants may not have their entire debt forgiven. Instead, the Department of Education will examine the applicant's claim and determine how much harm they incurred due to the school's actions. This will be translated into a percentage of their student loans that will be forgiven.