While some may be eager to forgive and forget loan debts, those who care about the integrity of higher education must continue to speak up
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CounterCurrent:
Forgive and Forget?
While some may be eager to forgive and forget loan debts, those who care about the integrity of higher education must continue to speak up
CounterCurrent is the National Association of Scholars’ weekly newsletter, bringing you the biggest issues in academia and our responses to them.
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Category: Student Loans, Government, Higher Ed;
Reading Time: ~3 minutes
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The growth of federal college debt forgiveness programs while string-free dollars continue pouring into colleges and universities should raise eyebrows.
Student loan forgiveness is a bait and switch ([link removed]) . Colleges still get paid and students still accrue debt, all while colleges and universities water down degrees, raise tuition, and never share accountability for driving students into debt.
Perhaps thrusting young adults into large amounts of debt with little to no financial planning knowledge is not the best social policy—I believe my colleague Jared Gould would agree ([link removed]) .
Implementing accountability measures in college and university administrations is a great place to start. The Republicans’ College Cost Reduction Act has been discussed ([link removed]) as a measure to provide this accountability, but even left-leaning organizations are jumping on board with measures of their own. “The days when the public just gave money to colleges with virtually no accountability mechanisms are numbered,” says ([link removed]) Minding the Campus contributor Andrew Gillen. “There is bipartisan agreement that more accountability is needed in higher education, and risk-sharing in particular is gaining traction.”
Gillen updated his article ([link removed]) on the current state of play earlier this month. Since April, the Biden administration has continued to charge full steam ahead in its efforts to forgive student loan debt for millions of borrowers. But new challenges to existing plans have also arisen. He notes ([link removed]) that:
* The newest plan relying on regulatory changes under the Higher Education Act has been released.
* There is a new court case against the SAVE plan.
* There is an update to the legal status of the borrower defense and closed school discharge plans to reflect an injunction from the Fifth Circuit.
First, after the Biden administration lost the HEROES plan in a Supreme Court decision, they quickly proposed a new plan which draws authority from the Higher Education Act. This new plan would ([link removed]) :
* Waive unpaid interest.
* Forgive debt for those who have repaid for 20 years (25 years if there is debt for graduate school).
* Forgive debt for those who attended a low‐financial value program (e.g., programs or colleges that fail the Cohort Default Rate or Gainful Employment).
* Release additional regulations soon (under a pending plan) that will forgive debt for those undergoing economic hardship.
This specific plan will likely run into the same legal actions as the HEROES plan and fall short.
Regarding the SAVE plan, which is a generous redo of the existing REPAYE plan, parts of the plan have been implemented with the entirety going into play in July of this year. Should the lawsuits not prevail, taxpayers would be saddled with an estimated $475 billion dollars in costs for the next ten years from the SAVE plan.
An injunction from the Fifth Circuit Court of Appeals has thankfully put on hold the recent changes to the borrower defense to repayment plan. Gillen explains, “If a for‐profit college can be declared to have substantially misled students, they can be ruined financially by the clawbacks. Indeed, new regulations from the Biden administration would make it much easier to conclude a college engaged in misconduct.” The program allows the Biden administration to use loopholes to forgive more debt outside existing law. Shadiness abounds in this plan. “For example, $5.8 billion of debt for Corinthian College students was forgiven even if students didn’t submit a borrower defense claim. The administration has promised to forgo clawbacks on much of it (likely in part to avoid giving affected colleges standing to oppose the changes in court).”
As the current administration continues its plans to forgive student loan debt—nearing ([link removed]) $160 billion out of $1.6 trillion in total debt—we must hold lawmakers and bureaucrats accountable for their actions. The Education Department has announced ([link removed]) that borrowers have more time to apply for the IDR Account Adjustment, a Biden administration program that can either result in immediate loan forgiveness or significantly shorten a borrower's loan term. Some of the administration's plans, like the new proposal under the Higher Education Act, are still open for public comment, while others are headed to court. Efforts to implement accountability for colleges and universities have yet to achieve their goals.
While the government and higher education institutions may be eager to forgive and forget, those who care about the integrity of higher education must continue to speak up.
Until next week.
Kali Jerrard
Communications Associate
National Association of Scholars
Read the Article ([link removed])
For more on student loans, government, and higher ed:
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May 20, 2024
** Against the Latest Student-Loan “Forgiveness” Scheme ([link removed])
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George Leef
The Martin Center opposes the Biden administration’s new loan-forgiveness rules for two basic reasons: They are outside of the Department of Education’s authority, and they will have adverse consequences.
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May 13, 2024
** Essential Insights for American Students on Government Operations ([link removed])
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Harrison Fox
The reality is clear: governments currently control around 30 percent of GDP, non-profits add another 10 percent, leaving the vast majority, 60 percent, generated and utilized by the private sector, encompassing businesses and households.
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February 24, 2021
** Report: Priced Out ([link removed])
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Neetu Arnold
As more Americans attend college, costs rise, and more students fail to graduate, we ask, "why?" Priced Out details the spending habits of 50 universities across America and provides perspective from students, parents, and college administrators.
** About the NAS
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