Walking away from student loan debt should not be an option
PennliveFeb 19, 2020
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Education Dept. to Cancel $5.8B in Debt for Students of Corinthian Colleges
Last updated Sep 20, 2022
Image credit: Getty Images [via The New York Times]Facts
- On Wed., the US Dept. of Education ("ED") made its largest student loan forgiveness action ever, saying it will wipe out $5.8B in college loan debt owed by some 560K borrowers who attended Corinthian Colleges (CC). CC was one of the nation's largest for-profit college chains before it collapsed in 2015.[1]
- Thousands of former students were already eligible for debt cancellation but had to navigate a process advocates say is confusing. Those who have a remaining balance on their debt will receive a refund on payments already made, but those who already paid it back aren't eligible.[2]
- After a 2014 investigation found that CC and its 105 campuses misled students by inflating their job placement rates, ED began withholding federal loans, forcing CC to close.[3]
- After CC's collapse, a grassroots group was founded called the Corinthian 15, which conducted a "debt strike." The group uncovered a legal loophole that said borrowers could ask the government for loan forgiveness if their college significantly misled them.[1]
- ED's announcement comes as Biden considers broader student loan forgiveness. He first indicated that such policy should go through Congress, however, he is now considering whether to pursue it through executive action.[2]
Spin
Republican narrative
Elected officials should show some restraint in encouraging people to walk away from their college loans. Buying college voters with promises of loan forgiveness or free college is no way to teach the fiscal discipline or responsibilities that college graduates should possess. This is unfair to taxpayers.
Democratic narrative
Today, most likely voters support student debt cancellation, even those who don't have student debt themselves. If Biden honors his campaign promise with a measure of student debt cancellation in the coming weeks, then a burden will be lifted from millions of hard-working Americans.
Nerd narrative
There is a 45% chance that the US government will forgive $10,000 of federal student loans per person before 2024, according to the Metaculus prediction community.
