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Education Dept. to Cancel $5.8B in Debt for Students of Corinthian Colleges

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]

Sources

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.

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