Biden Cancels Student Loan Debt for Half a Million Borrowers
The Biden administration is canceling all outstanding student loans for individuals who attended schools operated by Corinthian Colleges.
The Biden administration is canceling all outstanding student loans for individuals who attended schools operated by Corinthian Colleges, the U.S. Department of Education confirmed on Wednesday.
The agency estimated that the White House’s move will wipe clean $5.8 billion in debt for more than 560,000 borrowers—the largest single debt forgiveness action taken by the government to date.
Founded in 1995, Corinthian Colleges was formerly one of the largest for-profit education companies, and Biden’s move brings closure to one of the most notorious cases of fraud in higher education in the United States. The company, which had enrolled more than 100,000 students across 100 campuses, filed for Chapter 11 bankruptcy in 2015.
“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,” said Education Secretary Miguel Cardona, per CBS News.
“For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep,” he continued.
The news comes as the Biden administration is mulling whether to move ahead with broad-based student loan forgiveness. For months, lawmakers like Senate Majority Leader Chuck Schumer (D-NY), Sen. Elizabeth Warren (D-MA), and Sen. Raphael Warnock (D-GA) have aggressively pressed Biden to sign off on forgiving $50,000 of student loan debt per borrower.
The president, however, has indicated that he likely won’t go higher than his campaign promise of $10,000 per borrower—and now, there’s even a possibility that individuals making more than $125,000 or $150,000 a year would be ineligible for any relief.
To date, the Biden administration has signed off on $25 billion in loan forgiveness for about 1.3 million borrowers.
Meanwhile, there is plenty of pushback among some Republican lawmakers. For example, Sen. Mitt Romney (R-UT) and several of his colleagues have introduced the Student Loan Accountability Act, which would prohibit the Biden administration from broadly canceling student loan debt going forward.
“Democrats and Republicans alike have called on the president to not take this unwise step and pile more onto our $30 trillion national debt,” Romney said in a release.
“And while the President’s legal authority in forgiving this debt is dubious at best, our bill would ensure that he would be prevented from taking action,” he concluded.
Ethen Kim Lieser is a Washington state-based Finance and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.