'We Can Cancel All $1.8 Trillion,' Say Activists as Cardona Announces Full Debt Relief for Scammed Students

Education Secretary Miguel Cardona announced Thursday that he is rolling back a widely condemned policy implemented by Betsy DeVos--his billionaire predecessor--and moving to provide full debt relief for around 72,000 students who were defrauded by private for-profit colleges, a move that progressive activists welcomed while demanding far more sweeping debt cancellation.

"You have no idea how good that will feel or the outpouring of love you will get from millions of people. You would never have to buy another beer in any bar."
--The Debt Collective

"In 2015, former students at Corinthian Colleges went on a debt strike... As a direct result of that strike, we've won an additional $1 billion of debt discharge for 72,000 students," said The Debt Collective, an organization urging President Joe Biden to use his executive authority to forgive all outstanding student debt.

"Organizing works," the group added. "We can't stop now. We can cancel all $1.8 trillion."

Filmmaker Astra Taylor, co-founder of The Debt Collective, tweeted Thursday that "we only win what we organize for."

"Join the movement to cancel all student debt," she wrote.

Under the DeVos plan that the Biden Education Department is rescinding, students scammed by now-shuttered private schools such as Corinthian Colleges would only have been granted partial debt relief. In a statement Thursday, Cardona said that "borrowers deserve a simplified and fair path to relief when they have been harmed by their institution's misconduct."

"A close review of these claims and the associated evidence showed these borrowers have been harmed and we will grant them a fresh start from their debt," the education secretary added.

But as the Washington Postnoted, Cardona's move "only addresses a subset of the nearly 200,000 people who have filed claims in the last six years under a statute known as 'borrower defense to repayment.'"

In a press release, the Education Department said that under new administration regulations pertaining to defrauded students, relief will include:

• 100 percent discharge of borrowers' related federal student loans.
• Reimbursement of any amounts paid on the loans, where appropriate under the regulations.
• Requests to credit bureaus to remove any related negative credit reporting; and
• Reinstatement of federal student aid eligibility, if applicable.

Adina H. Rosenbaum, an attorney at the Public Citizen Litigation Group--which represented student borrowers in a suit challenging the DeVos policy--applauded Cardona's announcement as "great news for students who have been defrauded by predatory for-profit schools."

"Under the Department of Education policy adopted by the Trump administration, most students who successfully demonstrated that they had a defense against repayment of their federal student loan debt based on the predatory acts of the schools they attended received only minimal relief," said Rosenbaum. "The policy's methodology bore no relationship to the serious harm suffered by students who were misled or deceived by the schools they attended into amassing student loan debt in exchange for often worthless educations."

The new Education Department policy comes as Biden continues to face pressure from progressive lawmakers and outside advocacy groups to use his authority to cancel a big chunk or all of the student loan debt currently saddling tens of millions of Americans.

Thus far, Biden has committed only to canceling $10,000 in student loan debt per borrower through legislation because he says--falsely, according to experts--that he doesn't have the authority to unilaterally erase debt.

Sen. Elizabeth Warren (D-Mass.), Senate Majority Leader Chuck Schumer (D-N.Y.), Rep. Ayanna Pressley (D-Mass.), and other Democratic lawmakers are urging Biden to direct the Education Department to cancel at least $50,000 in student debt per person, a move that would amount to total forgiveness for around 80% of federal student loan borrowers.

"America's worst education secretary Betsy DeVos jumped through flaming hoops to stop the Department of Education from helping students cheated by shady for-profit colleges," Warren tweeted Friday morning. "It's great news that Secretary Cardona is rolling back her policies so students get the relief they deserve."

"The Department of Education has a responsibility to cancel student debt for defrauded students--but it also has the authority to help the other 43 million Americans struggling with student debt right now," the Massachusetts Democrat added. "It is time to cancel student debt to help lift this impossible burden off our families."