The U.S. Department of Education proposed new regulations on Wednesday to cancel student loans for individuals whose schools closed or who are permanently disabled.
According to a press release from the agency, the policy would also apply to students whose schools “lied to them” and “public service workers who have met their commitments” under the Public Service Loan Forgiveness (PSLF) program, which is defined as making payments for 120 months while working full-time for a government entity or nonprofit organization.
The move comes after the Biden administration canceled roughly $26 billion in student loans, including for students who attended for-profit colleges that have shut their doors, according to the press release.
“We are committed to fixing a broken system. If a borrower qualifies for student loan relief, it shouldn’t take mountains of paperwork or a law degree to obtain it,” Education Secretary Miguel Cardona said. “Student loan benefits also should not be so hard to get that borrowers never actually benefit from them. … These proposed regulations will protect borrowers and save them time, money, and frustration, and will hold their colleges responsible for wrongdoing.”
The proposed regulations would let borrowers make group claims more quickly and “curb predatory behavior” from schools by “recouping the costs of such discharges from the college, running for at least six years following the borrower’s last date of attendance at the school.”
Indeed, the Department of Education settled a class-action lawsuit last month after advocacy groups said the agency ignored students’ loan cancellation claims. Cardona greenlit the elimination of $6 billion in loans for 200,000 borrowers. Likewise, the Department of Education recently canceled debt from former attendees of Corinthian Colleges, a for-profit entity that filed for bankruptcy in 2015, nixing $5.8 billion in debt among 560,000 borrowers.
“As of today, every student deceived, defrauded, and driven into debt by Corinthian Colleges can rest assured that the Biden-Harris administration has their back and will discharge their federal student loans,” Cardona remarked.
Leading Democrats have argued for the past two years about possibilities for large-scale, one-time loan cancellation policies. The Biden administration is reportedly considering a plan to cancel $10,000 in student loans per borrower after making a similar promise on the campaign trail. However, Senate Majority Leader Chuck Schumer (D-NY) argued last July that “all President Biden has to do is flick his pen” and erase up to $50,000 per borrower, with no need for legislative action.
Two weeks ago, Schumer sought to dispel the “awful myth” that student loans are “not a problem that concerns the wealthy or the Ivy League,” arguing that “all of these fat cats, and people who never want to see help for working people and poor people come up with these myths.”
In response, Cato Institute policy scholar Neal McCluskey directed The Daily Wire to Brookings Institution data showing that almost one-third of student debt is owed by the wealthiest 20% of households, while 8% is owned by the bottom 20%. “Wealthy people do take on debt, and a lot of that debt is for graduate school,” McCluskey remarked, adding that “wealthier people are more likely to go to college and in particular, more likely to go to graduate school than lower-income families.”
Source: Dailywire
