Cancel Student Debt, Boost the Economy

By Alexis Goldstein

Photo by Mr.Autthaporn Pradidpong on Unsplash

In April, Senator Elizabeth Warren released a bold plan for free public college and debt cancellation. This transformational proposal takes direct aim at some of the deepest inequities in education in America, and it’s funded by her Ultra-Millionaire tax on wealth above 50 million. The plan includes a $50 billion minimum fund for historically Black colleges and universities (HBCUs) and minority-serving institutions, and will make public college tuition-free at both two- and four-year institutions.

Her plan also takes direct aim at the crippling $1.5 trillion debt burden that America’s student loan borrowers carry, proposing to free millions of people from the lasting limitations those debts are placing on lives and hopes. Perhaps no student loan borrowers have a harder time bearing this burden than those who attended for-profit colleges, who make less after graduating than they did before attending. Among the boldest and bravest part of Warren’s plan is imposing accountability on the for-profit education sector, an industry with a record of law breaking and abuse that is responsible for 34% of student loan defaults, despite only enrolling 9% of post-secondary students. Warren is proposing an all-out ban on for-profit colleges receiving federal student loan money.

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On the CFPB’s Fifth Birthday, Senator Warren Celebrates the Bureau’s Achievements

EW woo hoo freeze frame

This week, the Consumer Financial Protection Bureau (CFPB) turns five years old. AFR and a large number of consumer, civil rights, and community-based groups celebrated the anniversary, noting that life is better for American families and neighborhoods because the CFPB is at work fighting predatory lending and financial abuse. In addition to winning the praise of advocates, recent polling has shown that there is overwhelming, bipartisan support by the public for the work of the Bureau.

Senator Elizabeth Warren also delivered her own accolades to the Bureau in a video message that stresses the importance of its good work. In it, she notes that in just five short years, the CFPB has “ returned over $11 billion to consumers who were cheated on their mortgages, credit cards, checking accounts, and other financial products.”


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Advocates and Lawmakers Press for Relief to Groups of Students Victimized by Predatory Practices

For well over a year, lawmakers, law enforcement, advocates and scammed students alike have been pressuring the Department of Education to relieve the staggering debt of students who attended for-profit colleges like Corinthian which broke the law. In response, the Department convened a negotiated rulemaking session to clarify what the process would be going forward for students who were victims of illegal acts by their school, and wanted to assert their legal right to a “defense to repayment,” or debt cancellation.

But as outlined in a letter delivered this week and signed by 34 organizations, the Department’s draft of the proposed regulations has moved in the wrong direction. Among the worst items of their proposal is a requirement that defrauded borrowers seek debt cancellation within two years — or lose eligibility. This is particularly troubling because there is no limit on the number of years the government can collect on the student debt.

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