Biden Administration Announces Cancellation of $3.9 Billion in Student Loan Debt
President Joe Biden is set to cancel $3.9 billion in student loans, announcing that the federal government will discharge all remaining federal student loans for students who attended the ITT Technical Institute.
The student loan borrowers who attended the now-defunct institute will receive a discharge through “borrower defense to repayment” according to Forbes and do not need to apply to have their loans canceled.
“It is time for student borrowers to stop shouldering the burden from ITT’s years of lies and false promises. The evidence shows that for years, ITT’s leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs, with no regard for the hardship this would cause,” Secretary of Education Dr. Miguel Cardona said.
“The Biden-Harris Administration will continue to stand up for borrowers who’ve been cheated by their colleges while working to strengthen oversight and enforcement to protect today’s students from similar deception and abuse.”
The ITT Technical Institute was a well-known private technical institute based in Indiana with approximately 140 satellite campuses all over the United States. The institute operated until announcing on Sept. 6, 2016, that it would “discontinue academic operations at all of its ITT Technical Institutes permanently”.
Since taking the White House in 2021 Biden has canceled almost $32 billion in student loans, essentially subsidizing the educational expenses of a combined 1.8 million borrowers spread across “borrower defense to student loan repayment and school closures,” “public service loan forgiveness” and “total or permanent disability”.
Democrats continue to call for Biden to “#CancelStudentDebt“, a move that conservatives believe would obfuscate the transfer of debt from the individual borrowers to the American taxpayer.
Democratic Rep. Pramila Jaypal of Washington urged Biden to cancel all student debt.
Student loan payments are set to resume in 16 days. With the stroke of a pen, @POTUS can bring relief to millions of people across the country. Let’s get it done.
— Rep. Pramila Jayapal (@RepJayapal) August 15, 2022
Representative Cori Bush of Missouri also joined the refrain.
Right now, millions of people are living in limbo, unsure if student loan payments will resume in 16 days. Canceling student debt would provide immense relief to numerous borrowers.@POTUS, now is the time. #CancelStudentDebt
— Congresswoman Cori Bush (@RepCori) August 15, 2022
Conversely, Republicans have heavily criticized student loan forgiveness.
“Expansive student loan forgiveness does nothing to solve the problems in higher education and exacerbates the economic disaster fueled by the President’s lack of fiscal responsibility,” Rep. Virginia Foxx of North Carolina said according to Forbes.
“Time and again, President Biden operates as if he can issue any decree he wants on student loan forgiveness, even if it means exercising authority that he does not have.”
In an Op-Ed for Fox News, Foxx and Sen. Richard Burr, also of North Carolina, wrote, “By caving to progressives, President Biden is breaking his promise to over 100 million taxpayers without student debt who are subsidizing this boondoggle.”
They pointed the finger squarely at their Democrat colleagues in Congress, “Yet, when in the position to actually legislate, House and Senate Democrats are (un)surprisingly quiet on student loan debt. Rather than do their jobs, top Democrats are asking the president to do their dirty work for them, calling for an additional extension through the end of the year and debt forgiveness by executive fiat.”
The GOP legislators also voiced concerns that the proposed student loan cancelation would “easily push inflation above 9 percent” back in April when the piece was written.
Inflation hit 9.1 percent in June before pulling back slightly to 8.5 percent in July, according to Trading Economics.
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