The Biden administration is cancelling another $3.9 billion in debt for 208,000 borrowers. It’s another round of cancellation of federal loans for people defrauded by for-profit colleges, which turns out to be a very large group.
The newly announced move will affect people who attended the ITT Technical Institute—yet another defunct for-profit scammer—between 2005 and its closure in 2016. Previously, the Biden administration announced complete debt forgiveness for people who attended Corinthian Colleges, which added up to $5.8 billion for 560,000 students, and agreed to settle a class action lawsuit pushing for action on borrower defense to repayment applications. The borrower defense to repayment provision allows the discharge of debt for people whose schools engaged in misconduct, and that settlement was worth a projected $6 billion in debt cancellation for 200,000 people.
Some former ITT students may be included in that number if they applied for borrower defense, but under the administration’s new announcement, they don’t have to have sought that for their loans to be discharged. And if President Joe Biden allows student loan payments to resume after Aug. 31, ITT loans will remain in forbearance until the cancellation can be fully processed.
RELATED STORY: Biden administration to forgive $5.8 billion in debt for students defrauded by Corinthian Colleges
Campaign Action
“It is time for student borrowers to stop shouldering the burden from ITT's years of lies and false promises,” Education Secretary Miguel Cardona said in a statement.
In addition to the Corinthian Colleges debt cancellation and the borrower defense to repayment settlement, the Biden administration has also revamped the Public Service Loan Forgiveness program, introduced fixes to income-driven repayment, and extended relief to people with disabilities. But President Biden has not yet announced a decision on universal loan forgiveness, and if so, how much to forgive, with reports saying he will forgive $10,000 per student with income caps. That would wipe out student debt for about one in three borrowers, but a much smaller percentage of those who owe more than they originally borrowed 12 years after starting college—a group that is disproportionately Black.
The very fact that there are people who owe more than they originally borrowed shows the brokenness of the system, and makes a strong case both for full forgiveness of interest on past student loans and an end to interest on all current and future loans. Student debt would not be a $1.7 trillion problem affecting 45 million people without interest accumulating, raising the eventual price of higher education much higher for people whose families couldn’t afford to pay for it up front than what’s paid by people for whom the cost was manageable to begin with. Why should the child of, say, a home health care worker and a janitor pay more for college than the child of a doctor and a computer programmer?
The Biden administration has, through targeted interventions, cancelled nearly $32 billion in student debt. That’s far more than previous administrations, but it is not close to wiping out the existing problem, and it doesn’t make the fixes needed to keep the problem from continuing to get bigger.
Abortion rights, climate change, and gun safety are all on the ballot this fall. Click to start writing Postcards to Democratic-leaning voters in targeted House districts today.
RELATED STORIES:
Student loan debt: When refusing to pay is a solution
Another 200,000 people likely to get full student debt relief
Education Department announces student loan fixes for millions of low-income borrowers
'In shock': Public servants celebrate as loan forgiveness program finally starts working
