Robert Kuttner: Biden’s Chance to Save College Students from Crushing Debt | Diane Ravitch's blog

Robert Kuttner: Biden’s Chance to Save College Students from Crushing Debt | Diane Ravitch's blog

Robert Kuttner: Biden’s Chance to Save College Students from Crushing Debt

Kuttner on TAP

New Hope for Student Debt Relief

With the appointment of Richard Cordray as chief of federal student loan programs, we will now see the potential of executive power to bring relief and end abuses. Cordray is a close ally of Elizabeth Warren and former head of the Consumer Financial Protection Bureau.

The first best policy, of course, would be outright cancellation of up to $50,000 per student, as proposed by Sens. Warren and Schumer. Cordray can’t make that call. President Biden needs to. But there are several other things he can do.

For starters, there is the appalling story of management of cancellation of debt for people who do ten years of public service. This is authorized under the Public Service Loan Forgiveness program. But under Trump and his education secretary, Betsy DeVos, the Education Department did everything possible to deny this relief.

To date, just 1.26 percent of applicants have received debt relief. In fact, in a lawsuit brought by the CONTINUE READING: Robert Kuttner: Biden’s Chance to Save College Students from Crushing Debt | Diane Ravitch's blog

Secretary of Education Joins Senator Warren and Senator Schumer for Discussion With Student Loan Borrowers and Advocates + HBCU Capital Finance Debt | U.S. Department of Education

Secretary of Education Joins Senator Elizabeth Warren and Senator Chuck Schumer for a Roundtable Discussion With Student Loan Borrowers and Advocates | U.S. Department of Education

Secretary of Education Joins Senator Elizabeth Warren and Senator Chuck Schumer for a Roundtable Discussion With Student Loan Borrowers and Advocates

Today, Secretary Cardona joined a roundtable discussion alongside Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren to listen as student loan borrowers and advocates shared their stories about the impact student loan debt has had on their lives. The borrowers and advocates included a veteran father of five who was misled by a for-profit college, a recent college graduate, and a mother whose student loan debt led her to experience homelessness. The Secretary listened, asked questions of the advocates and promised to take the information he learned and the stories he heard back to the Department of Education to inform many of the future decisions regarding student loan debt.

"What I am hearing from you all is not only that there is this cloud hanging over your heads, but also that there is this great emotional impact which has severely interrupted your lives. This burden has created a generational impact of distress," said Secretary of Education Miguel Cardona. "Behind every case, there's a family, there's a person, there's a story. All of you sharing your stories helps to create a picture of what this is. There's work to be done. I'm committed to this, and your stories have strengthened my resolve to do as much as I can to support you and students like you."

Secretary of Education Joins Senator Elizabeth Warren and Senator Chuck Schumer for a Roundtable Discussion With Student Loan Borrowers and Advocates | U.S. Department of Education

Department of Education Discharges Over $1.6 billion in HBCU Capital Finance Debt

The U.S. Department of Education recently discharged approximately $1.6 billion of debt provided to Historically Black Colleges and Universities (HBCUs) that participate in the HBCU Capital Financing Program. This action will provide debt relief to 45 HBCUs – 13 public institutions and 32 private institutions.

"Our HBCUs have long been on an uneven playing field, financially, as compared to many other postsecondary institutions," said Secretary of Education Miguel Cardona. "This relief will further support these mission-critical institutions and help to ensure they have more resources to educate and graduate students during the unprecedented COVID-19 pandemic."

The Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) signed into law in December 2020 provided authority and funding to discharge debts held by HBCUs under the HBCU Capital Financing Program. In combination with funds provided in the American Rescue Plan, signed by President Biden on March 11, 2021, and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), HBCUs will also receive more than $5 billion through the Higher Education Emergency Relief Fund programs.

Since 1994, the HBCU Capital Financing Program has provided low-cost loans to finance and refinance infrastructure improvements at the nation's HBCUs.

Discharging these debts helps enable these institutions to focus their resources on supporting students, faculty, and staff for the duration of the COVID-19 national emergency. HBCUs can dedicate more funds to innovating the academic experience, supporting the socio-emotional development of their students, and continue as the leading producers of Black doctors and teachers during a time when the United States needs them most.

Institutions Receiving HBCU Capital Finance Debt Discharges

• Alabama A&M University
• Allen University
• Alabama State University
• Arkansas Baptist College
• Saint Augustine's University
• Benedict College
• Bennett College
• Bethune–Cookman University
• Barber-Scotia College
• Central State University
• Claflin University
• Clark Atlanta University
• Florida A&M University
• Florida Memorial University
• Grambling State University
• Hampton University
• Harris–Stowe State University
• Huston-Tillotson University
• Jarvis Christian College
• Johnson C. Smith University
• Lane College
• Lawson State Community College
• LeMoyne-Owen College
• Livingstone College
• Meharry Medical College
• Miles College
• Morgan State University
• Morehouse College
• Morehouse School of Medicine
• Philander Smith College
• South Carolina State University
• Shaw University
• Stillman College
• Southern University at Baton Rouge
• Southern University at Shreveport
• Talladega College
• Texas College
• Texas Southern University
• Tuskegee University
• University of the Virgin Islands
• Virginia Union University
• Voorhees College
• Wilberforce University
• Wiley College
• Xavier University of Louisiana

Department of Education Discharges Over $1.6 billion in HBCU Capital Finance Debt

Interactive: Explore who gains most from student debt forgiveness - The Hechinger Report

Interactive: Explore who gains most from student debt forgiveness

Interactive: Explore who gains most from canceling student debt

As economists and policymakers debate the merits of loan forgiveness, a peek into federal data shows how different proposals could affect different groups of borrowers

President Joe Biden, congressional leaders and debt experts continue to argue over student loan debt forgiveness — both how much should be canceled and which branch can offer relief. Biden told a questioner at last week’s CNN town hall he did not think he had the authority to cancel $50,000 for student loan borrowers, and instead would limit relief to $10,000. Earlier, the administration had said it was reviewing its options for forgiveness through executive action. Even the more modest figure of $10,000 per student would represent one of the most ambitious projects under the new administration, erasing an estimated $377 billion in debt.

Student debt forgiveness is popular among voters, but a handful of economists have questioned whether it helps those most in need. They argue that middle-class families will benefit more than poor and marginalized Americans.

There are many ways to look at the types of people loan forgiveness would benefit: Should we consider household income? What about net wealth? How would borrowers of different races be affected? A Hechinger analysis of federal data provides additional dimensions to the picture of student debt. We show more detail about where student debt falls most heavily and how different cancellation plans would affect different groups of Americans.

First, here is the overall picture of student loan debt and its rapid growth.

Americans amassed trillions of dollars in student loan debt in the course of just a few decades. Throughout most of the Department of Education’s life as a guarantor of loans and a direct lender, student borrowing remained below $20 billion per year, according to a 1998 report from the Institute for CONTINUE READING: Interactive: Explore who gains most from student debt forgiveness

Biden Extends Moratorium on Student Debt Collection; Dept. of Ed. Staff Expose DeVos Policies that Favor For-Profit College Sector | janresseger

Biden Extends Moratorium on Student Debt Collection; Dept. of Ed. Staff Expose DeVos Policies that Favor For-Profit College Sector | janresseger

Biden Extends Moratorium on Student Debt Collection; Dept. of Ed. Staff Expose DeVos Policies that Favor For-Profit College Sector

The Biden Department of Education has already begun taking action on higher education policy.

On Student Loan Debt Collection

First, there is positive news for student loan borrowers. As one of his first-day—January 20, 2021—executive orders, President Joseph Biden extended former President Trump’s moratorium on demanding federal student loan repayments through September 30, 2021.

The Washington Post‘s Danielle Douglas-Gabriel reports: “Following a request from President Biden, the Education Department said Wednesday it would extend the suspension of federal student loan payments through Sept. 30. The move arrives days before the moratorium is set to expire at the end of this month.  It makes good on Biden’s pledge to give borrowers some breathing room as the economy struggles to find its footing…  (T)he acting secretary of education said the agency would extend the pause on federal student loan payments and collections and keep the interest rate at 0 percent… With the extension, all borrowers with student loans from the Education Department will see their payments automatically suspended until Sept. 30 without penalty or accrual of interest. Each month until then will still count toward loan forgiveness for borrowers in public-service jobs. It will also count toward student loan rehabilitation, a federal program that erases a default from a person’s credit report after nine consecutive payments.”

Biden’s executive action extending the moratorium on student loan debt collection applies CONTINUE READING: Biden Extends Moratorium on Student Debt Collection; Dept. of Ed. Staff Expose DeVos Policies that Favor For-Profit College Sector | janresseger