Early in May, Biden forgave $6.1 billion in debt held by art students who had been taken advantage of by their schools.
Biden administration to clear $6.1B in debt of former Art Institutes students
The Biden administration will forgive $6.1 billion in debt held by 317,000 former students of the defunct for-profit chain the Art Institutes, marking one of the Education Department’s largest group discharges of federal student loans. The decision covers people who were enrolled at any Art Institute campus from Jan. 1, 2004, to Oct. 16, 2017 [. . .].
The Education Department will on Wednesday begin notifying eligible borrowers, who are not required to take action. The agency said it also will refund payments that former students have made on loans that are earmarked for forgiveness.
“This institution falsified data, knowingly misled students, and cheated borrowers into taking on mountains of debt without leading to promising career prospects at the end of their studies,”
President Biden said in a statement. “While my predecessor looked the other way when colleges defrauded students and borrowers, I promised to take this on directly to provide borrowers with the relief they need and deserve.”
This isn’t the first time Biden has come to the rescue of student borrowers unfairly saddled with debt. In fact, as of this January:
Using anti-fraud and consumer protection regulations, the administration has forgiven $22.5 billion for more than 1.3 million borrowers who claim they were cheated by their schools or that their schools closed.
But this is only one facet of the unprecedented debt forgiveness effort led by Biden. Look at what else happened this spring:
CNN: Biden to forgive $7.4 billion more in student loan debt for 277,000 borrowers
The Biden administration said Friday that it is using existing student loan forgiveness programs to cancel another round of student debt, totaling $7.4 billion for 277,000 borrowers.
Under President Joe Biden, the Department of Education has made it easier for some specific groups of borrowers, like public sector workers, to qualify for loan forgiveness. It also launched a new repayment plan that creates a shorter pathway to loan forgiveness for many low-income borrowers — and is at issue in at least two legal challenges from Republican-led states.
The second repayment program is the SAVE (Saving on a Valuable Education) plan, which Biden is justly proud of. As he said in January, speaking of Early Student Debt Cancellation:
Borrowers enrolled in SAVE who took out less than $12,000 in loans and have been in repayment for 10 years will get their remaining student debt cancelled immediately. This action will particularly help community college borrowers, low-income borrowers, and those struggling to repay their loans. And it’s part of our ongoing efforts to act as quickly as possible to give more borrowers breathing room so they can get out from under the burden of student loan debt, move on with their lives and pursue their dreams.
Does this affect many people? NBC News reported that under SAVE:
Most low-income borrowers will pay less. For example, a borrower making $38,000 a year with $25,000 in public student loans would see their payment drop from $134 to $43 a month, according to the Department of Education.
The White House said almost seven million borrowers have signed up for SAVE.
How big a deal is this? Well, according to a student borrower writing for Washington Monthly →
Psst: Joe Biden Has Solved the Student Debt Crisis
The president’s new student loan program, SAVE, will slash monthly payments for borrowers like me. It’s the large-scale debt relief activists have spent years fighting for. [ . . . ]
Under other repayment plans, the average borrower ends up paying more than the original amount they borrowed because interest accumulates. But the average undergraduate borrower who uses SAVE will repay only 60 cents on every dollar they borrowed. For low-income borrowers, the entire balance will be forgiven.
There’s never been a program like it. For millions of Americans, SAVE will be debt cancellation in the form of debt repayment. In other words, the large-scale debt relief activists have spent years fighting for is finally here—it just didn’t arrive in the packaging anyone expected.
Read that again → For millions of Americans, SAVE will be debt cancellation in the form of debt repayment. In other words, the large-scale debt relief activists have spent years fighting for is finally here—it just didn’t arrive in the packaging anyone expected.
From the start, Biden made a commitment to canceling student load debt. Then last summer the Supreme Court (which Trump built) cancelled his original, $430 billion debt forgiveness program.
But Biden is a political genius with decades of experience figuring out how to do hard things. As CNN reported in April:
In total, the Biden administration has authorized the cancellation of $153 billion in student loan debt for nearly 4.3 million people. That’s more than 9% of all outstanding federal student loan debt.
And his debt forgiveness programs are part of a still bigger effort to put college within reach of as many people as possible. As Biden explained:
This builds on all we’ve been able to achieve for students and student loan borrowers in the past few years. This includes fixing the Public Service Loan Forgiveness program so that borrowers who go into public service get the debt relief they’re entitled to under the law; achieving the largest increases in Pell Grants in over a decade to help families who earn less than roughly $60,000 a year; and holding colleges accountable for leaving students with unaffordable debts.
And, in the wake of the Supreme Court’s decision on our student debt relief plan, we are continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible. I won’t back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams.
Is there still more work to be done? 100%! Lots more work. But Biden has done so much more than many people guessed could be done. He deserves a lot of credit. AND he deserves to be re-elected.
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