Consider This from NPR - Is the U.S. Moving Closer to Erasing All Federal Student Loans?

Episode Date: June 11, 2022

After years of struggling to pay federal student loans used to attend the for-profit Corinthian Colleges, hundreds of thousands of student borrowers will have their debt canceled. Corinthian closed in 2015 after investigators found it had defrauded students with misleading claims about future job prospects. Earlier this month, The Department of Education discharged all outstanding debt for all Corinthian borrowers.With over a trillion dollars owed, federal student loan debt has been called a national crisis. Advocates for the cancellation of all federal student loans hope the Department of Education's latest move could signal a step in that direction.We speak with political strategist and student loan cancellation advocate Melissa Byrne. In participating regions, you'll also hear a local news segment to help you make sense of what's going on in your community.Email us at [e-mail] more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

The U.S. Department of Education announced it will erase nearly $6 billion in federal student loan debt for borrowers with loans from for-profit Corinthian colleges. It's being called the single largest act of student loan forgiveness in the department's history. I was kind of excited. I was really in shock because, I mean, it took so long. It took so long. The news of the debt cancellation was a big deal for hundreds of thousands of former Corinthian students like Latanya Suggs. She spoke to our colleagues at Here and Now. I went more into debt.

I'm not able to buy a house. I can't go back to school because my loans were in default. It just really set me back. She's hoping that the cancellation of her $40,000 debt will eventually help repair her credit. It was good before I went to college, but now it's pretty poor. So hopefully that this whole discharge that's going on right now will get it back up a little bit. But she's still not sure what she will do in terms of an education. I feel like the Department of Education should give me a for-free ride back to school. I feel like they should send us all to school for free because them years is

something we can't get back. Although we got our loans wiped out, but our degrees are useless. So we still are left with nothing. Consider this. Student loan debt has been called a national crisis. Advocates for student debt cancellation hope the Department of Education's latest move could signal a step toward canceling all federal student loans. That's coming up. From NPR, I'm Cheryl W. Thompson. It's Saturday, June 11th.

This message comes from Wise, the app for doing things in other currencies. Send, spend, or receive money internationally and always get the real-time mid-market exchange rate with no hidden fees. Download the Wise app today or visit WISE.com. T's and C's apply. The Education Department would cancel billions in federal

student loans for those who attended schools run by the now-defunct, for-profit Corinthian Colleges. That cancellation is allowed through what is called the Borrower Defense to Loan Repayment. This law has been on the books for years and years, but it was never really used until 2015 when Corinthian went bankrupt. Josh Mitchell is a reporter for The Wall Street Journal who covers the economy. It basically says if you can prove that you were defrauded by your school, you are entitled to have your loans canceled by the education department. But the question was, for years, how do you prove that? What qualifies as proof? In the case of Corinthian, there seemed to be plenty of proof, much of it gathered through state and federal investigations.

For example, at some of these campuses, they would say 92% job placement rate. But when state attorneys general and the education department started looking into their books, they actually discovered some of these job placement rates were actually 12%. And so a lot of students were essentially being misled according to these investigations. They were paying thousands of dollars and then they would come out and they just simply could not find a job. And in some cases, they would come out and they either couldn't find a job or they would find a job that only paid like $12,000 a year, even when they might have spent $20,000 for a program. Hundreds of thousands of former Corinthian students applied for the loan cancellation through borrowed defense, causing a backlog in processing those requests. Students were left waiting, burdened by debt with little to show for it until earlier this month. The Biden administration said, we're just going to treat this whole entire class of students as a class. This is essentially a class action suit,

if you want to look at it that way. And so instead of having individual borrowers, hundreds of thousands of people, come to the department and have, you know, employees look through each application. They just said, we're just going to cancel this in one fell swoop. The decision has helped redefine how federal student loan cancellation might look in the future. The interesting thing is, is that it's not just Corinthian that had these issues. There's a lot of other former students at colleges across the country, at other for-profit colleges, that have essentially said the same thing. And they're still asking to get their loans canceled. And so the Biden administration, while it took this big action, they're also drafting rules going forward to try to clarify when students can get their loans canceled and whether future

classes, future groups, not just individuals, can also have their loans canceled and whether future classes, you know, future groups, not just individuals, can also have their loans canceled. Could canceling the debt of former Corinthian students be a signal for millions of others who can't rely on borrowers' defense? That's coming up. I started taking out student debt as soon as I went to college. Melissa Byrne is a political strategist who has been advocating for the cancellation of all federal student loans. I talked to her about what she sees as the problem with the current system of funding higher education. She started with the personal side of the issue, the shame. For a long time, it was kind of the secret shame because I learned my first week in college

that people would judge you for having student loan debt. And as I finished up school and I entered the workplace, people judged me for having student loan debt. You said people judged you for having student loan debt. Who? I mean, who knew you had it other than the university? Well, like people would be like, oh, so are your parents paying for college? It's like, no, I have some loans. And they're like, ew, you have loans for school? And it was just one of those things where I had never been in an environment where everyone around me came from some levels of money. When I started school, there still wasn't a branding about first-generation students.

There wasn't a branding about people who come from working-class backgrounds and go to college or low-income people that go to college. And thankfully, that's changed a lot. But that didn't really exist when I was in school. And it was very much of, you know, the school was for like,

you know, our families have been going for a long time. This is what our families go to college. I think that's one of the problems, which is how this crisis got to where it is because in a lot of ways, it's shrouded in shame. It's invisible. And a lot of people whose parents paid for their college have this assumption that if you go to college, you come from wealth because people aren't running around with a label advertising themselves as how much debt they have. So, you know, there was a time when years would pass with little talk about student loan debt. Now it's being discussed as a crisis and reduction or cancellation of that debt has

become a political talking point. What do you make of that? One, it's a huge crisis. Over 45 million people have some level of student loan debt in America. And you also have millions of people who decide to forego college because they don't want to have debt. And so we basically have this paywall on education and have set up our higher education system to be, if you're wealthy, it's a gift from the parents to their children. If you're a poor working class and middle class, you have to make a choice between how much debt you can stomach. And I think in the last 10 years, people have really been stepping out of their

shame and demanding change happens. And you've seen that with the presidential campaign starting in the 2016 cycle. Bernie ran on free college. Secretary Clinton also ran on a modified form of free college. People started talking about student loan debt. And in the 2020 cycle, both Senator Sanders and Senator Warren ran on canceling student loan debt. And then the pandemic happened. And as part of the CARES Act, which passed in March of 2020, there was a pause on student loan payments and pausing the interest at zero. So we are now almost two and a half years

in to everyone with a direct federal loan, not having to make a payment on that debt and having that interest suspended at zero. So when at some point when the pause button goes back to play, will the interest from the time the loans were paused be due? No, because basically everything on that loan was just paused. So there will be nothing else added to it when they turn back on. But we're doing the organizing work to keep them from getting turned back on because we know that the people who have balances, they deserve cancellation. And we are very hopeful that the Biden administration is going to come through with cancellation. Well, speaking of the Biden administration, what do you think of the administration's decision to cancel all the debt for Corinthian College's students? Well, I think it's great that the Biden administration finally followed the law. That debt should have been canceled during the Obama administration. It should have been canceled during the Trump administration. And it's incredibly hard that I think it's like 400,000 borrowers were kept in limbo after being taken advantage of by a very predatory company. So what more is needed?

We need President Biden to pick up his pen and sign the executive order to cancel federal student loan debt. You've talked before about how student loans are predatory toward lower income students, many of whom are students of color. And you've described them as a method of punishment for them, the student loans. Explain that. Yes. Because what happens is, so ideally, whenever you feel like you're ready to go to college, whether it's 18, whether you're in your mid-20s, and maybe you have a family now and you know that getting that education is how you can do right by your family, once you make that decision, all that you should have to do is make sure you do your work really well in your classes

and that you are taking advantage of everything that that school is offering you. But if you're having to take on debt in order to do that, that means when you finish up school, you don't get to keep your paycheck. You are taking away the economic benefit of your education. That's 10% of your income. You can't put aside for a down payment on a house. Maybe you then feel too overwhelmed to take on more debt to be able to get that graduate degree other times what we see happen is that for example we see that black women end up taking on more debt to get that graduate degree because that's the only way that they'll have the opportunity to get the jobs that other people especially white people might get without having that extra degree so you

just end up buried and then it compounds in terms of the wealth that you're not able to create because you don't have that extra money that you've earned to be able to put forward for that. Some say that canceling student debt is unfair to those who have already paid back their debt or have started to pay back their debt. What do you say to that? Well, one thing is that I hate that it takes so long to make progress. And I think with any kind of movement towards better in America, there'll always be people who you weren't able to help because we're doing the organizing work

and we're trying now. And we can't stop progress because we weren't fast enough or because we had leaders in the past who weren't compassionate enough, who weren't brave enough. And what I would do is I would ask the people that who already paid back their debt and validate like, yeah, it sucks. It sucks that it's taken this long to get justice. But I hope that you can find in yourself a deep-seated feeling of solidarity, knowing that because these stories of people who were harmed in the past, we can make it better for the folks that are going forward.

And I think we all benefit when progress goes forward. That was Melissa Byrne, a political strategist and advocate for student loan cancellation. It's Consider This from NPR. I'm Cheryl W. Thompson.