After the Biden administration canceled $415 million in student debt for victims of for-profit colleges, Sen. Bernie Sanders (I-Vermont) called for the cancellation of all student debt, a move that could relieve tens of millions of borrowers of what is often a huge financial burden.
Wednesday, the Ministry of Education announced that he was canceling the debt of students misled by for-profit colleges like DeVry University. The agency received complaints from borrowers and found that the institution had made “substantial and widespread misrepresentations about its placement rates”.
Advocates and lawmakers welcomed the decision, but stressed that more needs to be done if the administration is to meaningfully address the student loan crisis.
“Good,” Sanders wrote on Twitter. “Now write off the remaining $1,883,214,046,704 for another 44,984,000 Americans still drowning in student debt.”
A massive student loan cut for victims of for-profit colleges took years to prepare; under the Trump administration, the judges ordered Education Department cancels student loans for for-profit college victims, but former Education Secretary Betsy DeVos refused to do it.
In a press release announcing the cancellation this week, the agency said it has so far canceled about $2 billion for about 107,000 borrowers under the program. Overall, Joe Biden canceled over $13 billion student loans in January.
As Sanders pointed out, however, this is a tiny sum of money compared to the amount of student debt currently held by borrowers across the country.
According to data from the Federal Reserve, borrowers organized a collective about $1.75 trillion in student loan debt in December, a record amount. Other estimates of the Student Debt Crisis Center peg the amount a bit higher, at around $1.88 trillion on Friday.
Either way, the number is astronomical compared to the amount Biden has written off so far — $13 billion is less than 1% of the total amount of student debt burdening borrowers. That’s also a far cry from the $10,000 in debt the president promised to forgive for every borrower during the campaign trail.
Indeed, Biden has been dragging his feet on the issue of student debt, even as Democratic and progressive lawmakers have been pushing him to act on the issue for more than a year. In public he has dodged questions on its inability to cancel debt so far, while the White House has said it considers revive student loans after pandemic-related repayment freeze a “high priority”.
The slowness of the White House on the issue and its intentional obscuration Biden’s legal authority to cancel student loans has led debt advocates to question whether or not Biden really wants to deal with the crisis, despite its huge impact on the economy.
Debt activists are plan a day of action in April to urge Biden to cancel student debt before loan payments resume in May, which a survey last year found would result in major financial hardship for thousands, if not millions, of borrowers.
Economic issues aside, proposals to cancel student debt are popular among voters — critical in the run-up to midterm elections that could lead Democrats to lose control of Congress. Recent Data for Progress survey found that 63% of likely voters say the federal government should eliminate some student debt for borrowers, with a whopping 88% of Democrats agreeing on the issue.
In an interview this week, Rep. Alexandria Ocasio-Cortez (D-New York) stressed that debt cancellation would be a “key action” for Biden ahead of this fall’s election, especially as the rest of the Democratic agenda is blocked in the Senate thanks to conservative Democrats.