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United States Education Government

US Announces $39 Billion in New Student Debt Relief (cnn.com) 194

Posted by EditorDavid from the a-loan-in-the-dark dept.
"The Biden administration announced Friday that 804,000 borrowers will have their student debt wiped away, totaling $39 billion worth of debt, in the coming weeks..." reports CNN.

That's an average of $48,507 per borrower, each of whom has "been paying down their debts for 20 years or more and should qualify for relief," according to a statement from the administration Friday's action addresses "historical failures" and administrative errors that miscounted qualifying payments made by borrowers, according to the Department of Education...

Since Biden took office, his administration has approved $116.6 billion in student debt relief for more than 3.4 million Americans, according to the Department of Education... Despite the Supreme Court last month striking down Biden's loan forgiveness program to provide millions of borrowers up to $20,000 in one-time federal student debt relief, his administration has continued to pursue other avenues to cancel debt and make it easier for borrowers to receive loan forgiveness...

While not part of today's actions, the Department of Education is also moving ahead with a separate and significant change to the federal student loan system that will enable Americans to enroll in a new income-driven repayment plan... Once the plan is fully implemented, people will see their monthly bills cut in half and remaining debt canceled after making at least 10 years of payments.
Last month the administration described student debt relief as "good for the economy... [G]ood for the country."
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US Announces $39 Billion in New Student Debt Relief More

US Announces $39 Billion in New Student Debt Relief

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  • This will get struck down too (Score:5, Insightful)

    by _xeno_ ( 155264 ) on Saturday July 15, 2023 @09:46AM (#63688031) Homepage Journal

    This isn't going to last, either. Biden and Pelosi were both very clear about this last year: any student debt relief has to start in Congress and cannot start with the Executive.

    They know this is going to be overturned as well. The president does not have the power to just decide to spend money that Congress has not previously allowed him to spend.

    • Re:This will get struck down too (Score:5, Insightful)

      by alvinrod ( 889928 ) on Saturday July 15, 2023 @09:53AM (#63688043)
      They know and they don't care. This makes an excellent carrot to dangle in front of prospective voters. It's better that it keeps getting pulled away by someone else because they keep just dangle it out in front of them again.

      • Re:This will get struck down too (Score:5, Insightful)

        by Fly Swatter ( 30498 ) on Saturday July 15, 2023 @10:04AM (#63688071) Homepage
        It is sad that our current state of education doesn't equip everyone to see right through this dog and pony show.

        • It is sad that our current state of education

          True, maybe we should let people get some higher education without asking teenagers whose grey matter hasnt even finished maturing into make life changing financial decisions.

        • Even if it did do that, for someone who's $100,000 in debt trying to pay off their underwater basket weaving degree working as a dishwasher or some other low skill labor, it makes a lot of sense to vote yourself some bread even if you fully understand why it's bad on the whole.

      • They know and they don't care. This makes an excellent carrot to dangle in front of prospective voters.

        "Prospective" voters would imply a younger audience who isn't currently saddled with a proven-worthless degree and tens of thousands in debt, and therefore could really give a shit about this problem that isn't theirs.

        As for the rest, that carrot has been double-dipped in sour buffalo bullshit sauce one too many times. If any voter is waiting on this in order to cast a vote, might as well hold your breath now and get the suffering over with.

        • In the eyes of a Politician, a prospective voter is one who has not yet been jaded by the system.

          They are inexperienced in the ways Politicians lie their ass off to those who do not yet have the wisdom to recognize their bullshit.

          This is why our Politicians fight so hard for this demographic. They are dead easy to manipulate.

    • Biden and Pelosi were both very clear about this last year: any student debt relief has to start in Congress and cannot start with the Executive.

      I keep seeing this repeated. Are there any citations?

      • Re: (Score:2)

        by Entrope ( 68843 )

        Pelosi: https://www.cnbc.com/2021/07/2... [cnbc.com]

        Biden administration: https://www.forbes.com/sites/z... [forbes.com]

      • Biden and Pelosi were both very clear about this last year: any student debt relief has to start in Congress and cannot start with the Executive.

        I keep seeing this repeated. Are there any citations?

        You mean other than the fact we might actually find a need to include Congress when debating things of this magnitude?

        I mean if they don't qualify with that price tag, I'd love to know why we keep paying salaries and light bills. That same Congress likely approved the spending in the first place, so...

    • No it won't (Score:3, Insightful)

      by rsilvergun ( 571051 )
      This is routine administrative tasks. The only reason not to do this would be if you just really hate young people and want them to suffer. This is literally people who do not technically owe the money but are still making payments and Biden's administration is going through the records and informing people that they don't need to keep paying the money. There won't even be a lawsuit.

      People are misunderstanding how the Supreme Court struck down Biden's last student loan debt relief plan. They did not say

      • Re: (Score:2, Troll)

        by nehumanuscrede ( 624750 )

        " This is literally people who do not technically owe the money but are still making payments and Biden's administration is going through the records and informing people that they don't need to keep paying the money. "

        These are people who don't understand the mechanics of how a loan works.

        If you pay nothing but minimum payments, you will NEVER get out from underneath the loan. Ever.
        It is a stupid idea to take on this debt before securing the financial means of paying it back as well.
        If you can't afford it

    • Re:This will get struck down too (Score:5, Insightful)

      by backslashdot ( 95548 ) on Saturday July 15, 2023 @10:52AM (#63688207)

      Wrong, the Supreme Court took the power of being able to invent definitions of words to contrive its decision. Congress DOES allow the executive branch to make these decisions. The premise of the supreme court decision was "the HEROES Act allows the Secretary to “waive or modify” existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, but it does not allow the Secretary to rewrite that statute to the extent of canceling $430 billion of student loan principal" ..except nowhere in the law is such a distinction specified -- waive or modify ought to mean exactly that -- for fucks sake it even allows waiver. The Supreme Court invented for itself what the word "modify" means. .. read it for yourself: https://www.supremecourt.gov/o... [supremecourt.gov]

      But in decisions like how long a copyright could go on for the Supreme Court said it wasn't up to it to play dictionary and decide what "limited time" meant. Limited time could mean 1 trillion years according to them.

    • I'm not so sure that's correct. I believe this is based on existing law, the same law that reduced payments in such a way that interest was capitalized, even if borrowers paid on time, so their debt always grew. ...The horror stories that people complained about. This coming forgiveness was covered in WSJ long before the latest scotus ruling. Those who read NYT would of course not know about that.

    • Re: This will get struck down too (Score:5, Informative)

      by chill ( 34294 ) on Saturday July 15, 2023 @12:27PM (#63688427) Journal

      The parent post is not insightful, it is ignorant. What was struck down was based on one specific law around emergencies, and this action is based on a completely different law - the Higher Education Act. One that very explicitly gives the President and the Secretary of Education the authority to set income driven repayment terms.

      • Re: (Score:2, Informative)

        by Jedi Holocron ( 225191 )

        Let us also not forget that the claimants in the SCOTUS case didn't really even have standing, but SCOTUS ignored that.

    • This particular action is different from debt relief. The debt was supposed to be relieved after 20 years if they followed the rules and paid regularly with an income-based repayment plan, which these people did. An agreement was made and past administrations did not live up to their side of the agreement. This is purely an administrative action that congress can't affect.

  • Make the colleges pay (Score:5, Interesting)

    by backslashdot ( 95548 ) on Saturday July 15, 2023 @10:02AM (#63688067)

    Accreditation agencies should require colleges to independently survey their graduates' salaries and employment rates and publish the results for each major. Before anyone gets a loan they must be informed of their future projected salary and employment probability. Everything else in the world comes with a warranty and some sort of performance guarantee, so college is getting off easy on that. We can't just allow colleges to trick their students into taking federal loans in majors that have no chance of paying back loans.

    • While that's a solid idea, those universities have powerful lobbying groups and are in no way letting their educational industrial complex go away. Best not to think of them as educating the future but rather promising a pathway to riches. They are selling hope!

    • We do (Score:4, Informative)

      by rsilvergun ( 571051 ) on Saturday July 15, 2023 @10:57AM (#63688223)
      For diploma Mills when there's a democrat in charge of the White House they were cut off from federal aid because their students couldn't earn enough money to pay the bills. For public universities this is rarely a problem in the sense that students can make the payments the problem is that the size of the payments is crushing them economically and crushing our entire economy with it.

      Mind you in a republican gets into the White House all of this gets thrown out the window and the diploma Mills start right back up. You can find articles discussing Obama shutting down dodgy fake universities left and right and then Donald Trump immediately reopening them all. I know folks don't like to talk about partisan issues but this is very much a partisan issue.

      The other issue is that the baby boomers and older Gen x had their education paid for by the government through direct subsidies that were cut in the early 2000s. I was there when it was happening and I remember the university newspapers talking about how cutting the state and federal subsidies would cause tuition to shoot up through the roof.

      Americans really really hate it when the government pays for anything. We like to think of ourselves as a bunch of rugged individualists making it on our own and pulling ourselves up by our bootstraps. So when the government does subsidies here they hide it from us like we're petulant children. In the case of mission subsidies the money was given directly to the universities who passed it on to the students in the form of super low tuition.

      And before a bunch of people come in here and claim it's high administration costs the administration costs haven't really gone up all that much. Universities have grown so they have added more staff to serve the largest student body and there is a shitload of new technology that students have to be taught on and an equally large shitload of employees managing and maintaining that technology for the students. The result is there has been a noticeable increase in the total number of what can be called administrative positions and this is what people use when they want to make you think that the problem is overpaid teachers and not the fact that we cut tens of billions of dollars of indirect subsidies.

      The fact of the matter is the baby boomers and older Gen x had their college paid for by taxpayers and now they get upset when the younger generations ask for the same. That's pretty messed up

    • Re: (Score:2)

      by m00sh ( 2538182 )

      Much much simpler solution.

      Cap student loan payments for 10% of discretionary income for 10 years (its 25 years now). No BS gotchas in it like submitting this form and that form.

      • Re:Make the colleges pay (Score:4, Interesting)

        by nevermindme ( 912672 ) on Saturday July 15, 2023 @12:03PM (#63688387)
        You want government to pay something or defer collecting taxes on something, there is a form involved. There was a president of the past who ran on reducing government red tape. My solution has aways been to have the institutions write the loan. If the education is insufficient to pay said loan, it is the provider of the service problem.

        • Re: (Score:2)

          by m00sh ( 2538182 )

          I meant gotchas, like they denied most loan forgiveness on gotchas before it was reversed lately by Biden.

          Make universities put up collateral that the debt is expected to be paid by the student in 10 years. If not, university pays the remaining balance. So, if a university wants to create a program and ask students to take on debt, they can't just saddle students with debt and kick them out the door and not be their problem.

          If students fail, make it the university's problem also. Don't let them blame stude

    • Re:Make the colleges pay (Score:5, Insightful)

      by dcollins ( 135727 ) on Saturday July 15, 2023 @12:44PM (#63688473) Homepage

      "Everything else in the world comes with a warranty and some sort of performance guarantee"

      I can tell you're not reading any of your software licenses.

    • Wait, so you are saying colleges have to PREDICT THE FUTURE for salaries of specific jobs related to a degree? Have you thought this out? You need to put in some more effort.

      A ton of people don't do directly related jobs; sometimes completely different than their education. A 4 year education is basically 2 years general and 2 years specific; the general helps in ways people don't even realize; much more so for people who take those seriously as students. The 2 years specific may or may not have a lot t

  • So painful (Score:3, Interesting)

    by bobbutts ( 927504 ) <bobbutts@gmail.com> on Saturday July 15, 2023 @10:05AM (#63688081)
    I'd rather take all the money on all these programs and just make government run college 100% free. More opportunity and less debt for students and better ROI for taxpayers.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      That's how it works in some parts of Europe, and it's great. Young people don't have to make the decision to take on massive debt as soon as they turn 18, and the country gets highly skilled workers to power the economy.

      • Thatâ(TM)s how it works in Tennessee and I think Kentucky as well. Not sure why everybody points to Europe.

        • Re: (Score:3)

          by dfm3 ( 830843 )

          Thatâ(TM)s how it works in Tennessee and I think Kentucky as well. Not sure why everybody points to Europe.

          That's not exactly how it works, but effectively yes, students in Tennessee can get much of their two-year college tuition covered through what's called Tennessee Promise.

          Simply put, a third party organization (Tennessee Achieves) pays for the remainder of a student's tuition balance at the state's community colleges, or pays some portion (but not 100%) of tuition at 4-year institutions such as UT. It doesn't cover all fees and expenses though, so a student in a welding program would still have to buy the

          • Yeah - it's pretty close to how it works in Europe. It covers 4 years, though, not just 2, and it pays 100% at plenty of community colleges.

            This is a better model, anyway. Tell everybody "here's how much we'll pay" and the free market is able to say "well, we can provide an education at that price".

  • These borrowers were cheated? (Score:5, Insightful)

    by doug141 ( 863552 ) on Saturday July 15, 2023 @10:09AM (#63688091)

    FTA: "for 804,000 borrowers who have been paying down their debts for 20 years or more and should qualify for relief. Instead, many were placed into forbearance by loan servicers in violation of the rules, and others did not get appropriate credit for their monthly payments."

    I read a post about borrower who was supposed to have his debt wiped 5 years ago after he hit the time limit on a loan being paid back on an income-driven plan, but it wasn't, and he kept making payments while contesting it, and eventually got it retroactively fixed and got his 5 years of payments back. Sounds like there are 800,000 cases like his? I don't understand how creditors are allowed to cheat on the terms, nor why the fix is this executive action rather than making dishonest creditors follow the rules.

    • That's what it sounds like. It seems when they were looking to do student loan forgiveness, they found a bunch of issues with how the program was being run in the first place. They "fixed the glitch", but in a good way.
    • Outside the military, social security and medicare, the US government is extremely underfunded. The voters prefer it this way. 8 month waits for passports, hollowing out the IRS even though every dollar spent there brings in 6 extra dollars of delinquent tax, 8 month waits for a court case, the list goes on and on and on. No surprise to me that federal loan processing is 5 years behind.

      I’m not complaining about this, really. We’re a democracy. We get the government that we choose. As a whole
      • This is not at all what we want. The problem is that we predominantly have a two party system. That system tends to promote left and right views but suppresses the center/independent. The priorities of the loudest on the left and the right are debated over and funded or unfunded. But the wants and needs of everyone else is just getting ignored. At this point there are more independents than either Republicans or Democrats, but those independents are not getting the representation they should if it were a be

  • I have a better idea (Score:5, Interesting)

    by MpVpRb ( 1423381 ) on Saturday July 15, 2023 @10:23AM (#63688121)

    Keep the loans in place and eliminate the interest. Credit all interest already paid toward principal
    Many borrowers have already paid amounts exceeding the original principal
    Make future loans interest-free

    • That's not a good idea. No interest means that someone else has to pay for cost of the money being unavailable. Inflation + long term holdings allow invested money to grow at 5-10%.

      The typical economics 101 example is that parents with 2 children should not give 1 sibling an interest free loan because it takes money from a) their retirement and b) the inheritance passed to both siblings.

      • Exactly.

        No sane person is going to lend money for free with zero risk to the one taking out the loan.
        There is a reason things like " collateral " exist. Both sides take a risk.

      • Re: (Score:3)

        by m00sh ( 2538182 )

        If you can't discharge the loan through bankruptcy, then interest should be 0.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      The two key monetary reforms that would totally transform the world:
      1 - prohibit usary (compound interest)--only allow a flat fee for loan services
      2 - eliminate central banks and debt-backed currency. Fiat is fine--issued by the treasury itself--so long as the supply is controlled by a published algorithm governed by votes from the people--not by a powerful SIG.
      The above two items would relegate currency to a means of economic exchange rather than now where it's a means to enslave the populace by the banker

      • 1) Flat fees would go way up to take inflation into account. That'd make getting loans that much harder, and thus slow or completely stall out the economy. 2) "governed by votes from the people". This still won't eliminate the basic, human nature of greed. Nor would it address the real issue: the growing lack of accountability in our economy. The top C-level jobs, the bankers, etc. are all getting better at dodging accountability for their "sins". Until that's resolved in a meaningful way (i.e. corporate le

    • Re:I have a better idea (Score:4, Interesting)

      by sarren1901 ( 5415506 ) on Saturday July 15, 2023 @10:37AM (#63688155)

      You'll need a tiny bit of interest to pay for administration cost of the loans themselves, but certainly 1% could cover that.

    • Re: (Score:2)

      by m00sh ( 2538182 )

      Keep the loans in place and eliminate the interest. Credit all interest already paid toward principal
      Many borrowers have already paid amounts exceeding the original principal
      Make future loans interest-free

      Make it dischargeable through bankruptcy after 10 years.

  • ... when first we learn our loan's been outlived?

  • Should focus on core problem (Score:3)

    by skam240 ( 789197 ) on Saturday July 15, 2023 @11:15AM (#63688269)

    I'm at least a bit empathetic to student load debt but I'm finding the Democrats actions on this issue highly frustrating as so far I have seen absolutely zero energy from them in addressing the core problem here and that's the high cost of college education. Debt forgiveness is all well and good but a decade from now we're just going to have a ton of college graduates horribly in debt again just as we do now.

    • Re: (Score:2)

      by m00sh ( 2538182 )

      I'm at least a bit empathetic to student load debt but I'm finding the Democrats actions on this issue highly frustrating as so far I have seen absolutely zero energy from them in addressing the core problem here and that's the high cost of college education. Debt forgiveness is all well and good but a decade from now we're just going to have a ton of college graduates horribly in debt again just as we do now.

      1. People were straight up duped into student loans. Loan office would just print out the documents and say just sign here.

      2. Income based repayment plans: If the debt cannot be repaid at 10% of discretionary income in 10 years (it is 25 years now), then it should be forgiven. So, there is very little incentive to give big loans to jobs that will never make money.

      • Re: (Score:2)

        by skam240 ( 789197 )

        Absolutely nothing you've said changes the fact that we're not going after the core problem here. We are absolutely going to have this exact same problem a decade from now if we dont do something about the core underlying problem which is the cost of a college education. Your forgiveness plan is just basically the same thing as Biden's current debt forgiveness except not done for everyone all at once. It's still slapping a band aid on ridiculous amounts of debt that shouldnt have been there to begin with wh

        • Re: (Score:2)

          by m00sh ( 2538182 )

          I saw universities shift focus to making money from being a learning and knowledge institution. It turned into a business of selling "college" for student debt. I saw people promoted who focused on money instead of improving the university.

          Starve them out and all that cancer that grew from easy money will die out. That cancer of money did despicable things and forced so many people to shift focus to taking larger, dumbed down and more basic classes.

          Hopefully universities will go back to what it used to be.

      • You can't just solve everything everywhere all at once.

        People complain too much about stuff they don't know. There are MULTIPLE PROBLEMS and dealing with debt holding back generations from moving forward benefits all and is a tiny amount compared with the massive corporate welfare. These people will pay taxes on this money they will now have and build up wealth sooner and possible greater so it'll pay back more long term than it likely costs us today.

        COST of education is multiple problems that need to als

        • Re: (Score:2)

          by m00sh ( 2538182 )

          The cost increased only because of cheap debt. Kill cheap debt and it will kill off the nasty cancer that grew on every university from this easy money.

          So many good people who dedicated their life to education were sidelined and forced into nasty things because the money makers were promoted and ruled universities.

  • I thought SCOTUS ruled against this about a month ago.

    If your college degree is so worthless you cannot be expected to repay the loan . . . Then certainly your college degree is too worthless for your neighbor to repay your loan.

    • Nope. not same; but maybe SCOTUS will find more excuses to impose their opinions it's not like they are honestly interpreting the law. Multiple laws give the ability to do this and Biden can use them all until SCOTUS gives up or decides to get more blatantly corrupt than they already have.

  • The WH is betting that many simpletons will blame the republicans for not allowing the vote buying.

  • At least on US levels. In Europe, you can usually complete a degree without debt or with manageable debt (say, 10k EUR). This is essential to get anybody talented to get one and that is essential to keep the industry going. Getting that first degree or not should be mainly (ideally: purely) based on merit, not on money or you get more and more morons with degrees and less and less people that should actually have gotten one without it.

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