[The lesson from the Corinthian debt strikers: Should President
Biden cancel student loan debt, it should be done without making
debtors jump through hoops.]
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CANCELING STUDENT DEBT SHOULD BE A UNIVERSAL BENEFIT  
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Ann Larson
June 17, 2022
The Nation
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_ The lesson from the Corinthian debt strikers: Should President
Biden cancel student loan debt, it should be done without making
debtors jump through hoops. _

Student loan borrowers gather near the White House on May 12, 2020,
to tell President Biden to cancel student debt., Paul Morigi / Getty
Images for We, The 45 Million

 

Two major student debt stories have hit the headlines in recent days.
First, the Department of Education announced that it is canceling $5.8
billion in loans held by 560,000 former students of Corinthian
Colleges, Inc, a for-profit college chain that lied to and defrauded
[[link removed]] low-income
[[link removed]] students.
Second, news outlets reported that President Biden is close to
announcing
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plan to cancel $10,000 in student loans for individual borrowers to
address the $1.7 trillion crisis. This relief will likely be means
tested—offered only to those earning less than $150,000 per year.

This piece was supported by the Economic Hardship Reporting Project
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What most people don’t know is that these stories are intimately
related. As a cofounder of the Debt Collective, a union for debtors, I
collaborated with former Corinthian students to launch the first
student debt strike
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US history in 2015. Strikers refused to pay their loans and submitted
applications for relief via a then-obscure law called Defense to
Repayment
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provided a path to cancellation for borrowers whose schools had broken
the law. Strikers demanded that the federal government eliminate their
debts, shut down for-profit schools, and make public colleges free for
all. They forced
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Department of Education to cancel some loans and proved such
formidable opponents to Trump’s secretary of education, Betsy Devos,
that a judge held her in contempt
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continuing to collect their debts. If Biden cancels student loans this
year, it will be largely because the Corinthian campaign put the issue
on the national map.

But there is a further lesson to be drawn from the connection between
two headlines. The story of how two former Corinthian students fought
for relief with dramatically different results shows how the attempt
to target social policy to the “truly” deserving
often disproportionately harms
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whom the benefit is intended to help.

After his high school graduation in 2008, Nathan Hornes moved to Los
Angeles to start a music career. Instead, he found himself stuck in
fast-food jobs. He saw a commercial for Everest College, a branch of
Corinthian. One day he and his sister, Natasha, took the bus to the
Ontario campus where a recruiter convinced them both to sign up on the
spot.

Almost from the start, the pair suspected something was wrong. Even
though the school was nationally accredited
[[link removed](ACICS).] by
two organizations recognized by the Department of Education, the
classes did not seem serious, and college officials pressured them to
sign documents they didn’t understand. Soon the reality of the
situation hit like a punch to the face. Neither was able to find jobs
in their fields after graduation, because the school had a poor
reputation and employers knew it was not providing students with a
real education. Nathan, who was now $60,000 in debt for a diploma in
business, went back to fast food, and Natasha, who owed $28,000 for a
paralegal degree, worked in a grocery store
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home state of Missouri. Determined to fight, the pair led a debt
strike as members of the Corinthian 15
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The Hornes had reason to hope that Corinthian debts would be wiped
away as a result of their activism, which was backed up by mountains
of evidence that the school was corrupt. The Senate, which had been
investigating
[[link removed]] the
school since at least 2012, documented
[[link removed]] numerous
violations of federal regulations including exaggerating job placement
rates and falsifying the employment records of graduates. In 2013
then–California Attorney General Kamala Harris sued the school
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false advertising.

Other federal and state agencies investigated Corinthian for
aggressive recruitment practices and for altering students’ grades
and attendance records
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keep federal money flowing. In 2014, the Department of
Education began threatening the school
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a shutdown. Once the strike launched, federal officials claimed to be
on the side of borrowers. Secretary of Education Arne Duncan said he
was committed
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doing right by former students. Instead, his office placed a series of
obstacles in their path, including appointing a “Special Master
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to review debtors’ claims one at a time. To borrowers, this was a
baffling response to a fraud that had impacted hundreds of thousands
of people from coast to coast.

The harm caused by the delay was immense. Debt collectors working on
behalf of the government can garnish wages, offset tax returns, and
ruin credit scores. Collectors can even seize a portion of a
debtor’s disability or Social Security benefits.

Obama administration officials imposed another hurdle when more
accusations of fraud forced the colleges to close
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good. Individuals had to fill out paperwork affirmatively attesting
that they had been attending the school when it closed. Those who
didn’t fill out the form because they didn’t know about it or
didn’t have access to a computer were left in debt.

Borrowers who had left Corinthian prior to the closure were also
burdened by bizarre requirements. For example, the
Department determined
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a branch of Corinthian had lied to students enrolled in a Criminal
Justice program in West Los Angeles. But only those enrolled from July
2013 to September 2014 were eligible for loan relief. There were many
similar cases of cancellation granted to some and not others. Through
all of this, the Corinthian activists demanded the only practical
solution: an immediate, automatic, group-wide discharge of all
Corinthian debt, no applications required. They were told this
sensible solution was pie-in-the-sky.

Then Trump won the election. Betsy DeVos refused to cancel
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debts of borrowers who had already been deemed worthy of relief.
Lawyers at the Project on Predatory Student Lending sued the
Department
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ensure that the handful of discharges approved in the final days of
the Obama administration were actually processed. In 2018, Nathan
Hornes received word that his loans were gone. His sister was not so
lucky. Inexplicably, Natasha kept getting collection calls, and her
taxes were offset to pay her defaulted debts.

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The different results experienced by the Hornes siblings demonstrates
what individualized, application-dependent programs can feel like to
the people they are intended to serve. Requiring that people meet
arbitrary requirements, fill out forms, and prove their eligibility is
incredibly difficult and demoralizing. For every Nathan who accesses a
benefit, there is a Natasha who doesn’t. The reasons are rarely
clear.

To make matters worse, these administrative barriers are often
justified using the moral language
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the most vulnerable. Though Corinthian borrowers experienced the
process of proving their eligibility as unfair and punitive, they kept
fighting. Former enrollees in the for-profit institution ultimately
filled out more than 150,00 claims
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relief by 2019. The recent news that the department has finally
granted automatic discharges with no application requirement shows
that the strikers were correct all along.

There are lessons here for the broader issue of student debt
cancellation. Should President Biden keep his campaign promise and
cancel at least some debt for regular borrowers, it should be done
without making debtors jump through hoops. Biden must abandon any
plans to impose an income cap on those who get relief. (By law, the
Education Department does not have access
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borrowers’ tax data, and thus any attempt to means-test relief will
require that borrowers submit an application and prove their income,
ensuring in practice that millions of people will not get the debt
cancellation they are legally entitled to.)

Canceling student debt as a universal benefit is good politics as well
as good policy. Broad-based loan relief will dramatically reduce
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racial wealth gap and disproportionately help women who hold
two-thirds
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student loan debt. There is no reason to make young people—many of
whom, polls show
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have soured on the Biden administration—scramble for debt relief.
Labor unions have also come out in support
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loan forgiveness with no income limits.

The smart move is for Biden to follow the lead of the debt strikers,
learn from the Corinthian fiasco, and not repeat the mistakes of
earlier administrations. He should use his executive authority
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cancel student loans for everybody with the stroke of a pen. Then he
should instruct Congress to pass a law making public college free, so
future generations are not burdened by unpayable loans. Simple and
highly effective. Imagine that.

ANN LARSON is a writer and activist focused on education, debt, and
low-wage work. Her writing has appeared in _The New Republic_, _The
Chronicle of Higher Education_, and other publications.

_Copyright c 2022 THE NATION. Reprinted with permission. May not be
reprinted without__ __permission_
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Distributed by__ _PARS International Corp
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* Student Debt
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* Joe Biden
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* racial wealth gap
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* Women
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* Obama
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* Donald Trump
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