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

Education Secretary Miguel Cardona Begins to Rectify Injustice in Department’s College Loan Program | janresseger

Education Secretary Miguel Cardona Begins to Rectify Injustice in Department’s College Loan Program | janresseger

Education Secretary Miguel Cardona Begins to Rectify Injustice in Department’s College Loan Program

Last Thursday, March 18, 2021, Education Secretary Miguel Cardona rescinded a policy devised by his predecessor, Betsy DeVos, for processing complaints by students who claimed to have been defrauded by unscrupulous for-profit colleges and trade schools. DeVos’s policy denied debt relief for thousands of students whose complaints were not carefully or fairly considered.

The U.S. Department of Education manages an enormous higher education loan program which has been criticized by borrowers and members of Congress alike—all concerned that under former Education Secretary Betsy DeVos, student borrowers were left unprotected after for-profit colleges and trade schools induced them to take out big loans for shoddy education programs. Because these institutions are highly dependent on federal student loans to cover their operating expenses, they too frequently prey on students and military veterans with fraudulent advertising about the nature and quality of the programs to which they lure students. A federal rule called “the borrower defense to repayment” is supposed to protect students by cancelling their student loans when the students can prove the schools’ promises were fraudulent.

The Washington Post‘s Danielle Douglas-Gabriel explains the significance of Cardona’s action last week: “About 72,000 people will have their federal loans canceled after Education CONTINUE READING: Education Secretary Miguel Cardona Begins to Rectify Injustice in Department’s College Loan Program | janresseger

Biden needs to pursue student loan forgiveness - USA TODAY

Biden needs to pursue student loan forgiveness

Student loan forgiveness: Biden can restore a broken promise

We found a minefield of deceptions by student loan companies and negligent indifference by government officials.

Kelly Finlaw is a middle school art teacher in New York City. Over the last year, she has also been called an “essential employee,” a “frontline worker” and — a term she has certainly never attributed to herself — a “hero.” During this time, she has done everything she could to meet the needs of her students and make remote learning work as well as possible, all the while knowing it is no substitute for being in the classroom with her students.

Yet despite delivering on her promise to educate the next generation of Americans — even in the midst of a pandemic — the federal government has broken its promise to her. Finlaw remains stuck with nearly $90,000 in student debt that should have been canceled years ago.

Finlaw, along with millions of others, was made a simple pledge: If she worked for a decade as an educator, as a nurse or in another public service profession, her student debt would be wiped away. 

The Public Service Loan Forgiveness program 

That was the intent of the federal Public Service Loan Forgiveness program — a bipartisan law that recognized that spiraling student debt burdens are particularly punishing for workers in public service, and that our communities and our country are worse off if this burden drives a generation of students away from careers as educators, healthcare workers, first responders, and other public service workers. CONTINUE READING: Biden needs to pursue student loan forgiveness

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