Chicago Tribune: Student loan forgiveness must target needy


Chicago Tribune (TNS)



Attacking “waste, fraud and abuse” is a common promise made by both parties, but too often forgotten after the campaigning is over. On the touchy issue of student loan debt forgiveness, President Joe Biden can hardly afford to forget.

On the one hand, everyone knows that debt from student loans is raging out of control. On the other, Democrats don’t want to further compound their popularity problems by forgiving Ivy League tuition for elite big spenders while dinging those who chose to live within their means at college, or who made the decision to choose a cheaper state school to avoid going into debt, even if they were accepted at more expensive institutions.

Democrats go down that path at their peril. Ordinary, middle-class Americans proud of their Big Ten or stellar regional university education will scream unfairness. And they will be fully justified in doing so.

Smarter then, for the Biden administration to take on the horrors of waste, fraud and abuse as a pathway out of a long-running political and financial dilemma.

Of course, loans to help students attend college have always been more popular than the pesky subsequent need to pay them back. Biden, who campaigned on promises of relief from crushing student loan debt, has extended the pandemic-driven student loan payment moratorium four times since he took office, with the last one due to end Aug. 31, leaving up in the air whether and how it might be extended again.

In the meantime, the president rightly has resisted pressure from his party’s progressive wing to grant wholesale student loan forgiveness. Instead, his administration has taken a series of actions to bring relief under existing programs without letting borrowers completely off the hook in paying back their loans.

The latest moves in this piecemeal approach were announced Tuesday by the Department of Education. In general, they aim to make it easier for federal student loan borrowers to receive forgiveness to which they may already be entitled under existing public service loans and income-driven repayment, or IDR for short, programs that plainly have failed the low-income borrowers they were intended to help.

Among other moves, the Education Department says it will retroactively help millions of federal student loan borrowers who have been hurt and held back by its flawed IDR plans, calling the plans’ long-running mismanagement “inexcusable.”

That fix is overdue. The changes follow calls last week by Democratic Sens. Dick Durbin of Illinois, Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio for the department to investigate mismanagement of the IDR program and to provide borrowers with debt relief.

Those conservatives who feel understandably queasy about any student loan forgiveness ought to bear in mind that some rapacious for-profit colleges are notorious when it comes to saddling students with debt unlikely ever to be repaid.

The lawmakers’ letter cited a recent report from NPR that found that very few borrowers were able to get the loan forgiveness they were promised by the debt repayment program.

Last year, the administration temporarily expanded eligibility for the Public Service Loan Forgiveness program until Oct. 31, 2022. So far, the Department of Education has identified more than 113,000 borrowers with about $6.8 billion in loans who are eligible for student debt cancellation due to the waiver.

In the area of more blatant fraud or abuse, the administration announced a new effort to reduce a backlog of forgiveness claims filed under a policy to enable students who were defrauded by their colleges to seek federal debt relief.

Under that policy, the Biden administration has canceled about $2 billion in debt held by more than 105,000 individuals who attended for-profit colleges and another $1.2 billion for borrowers who attended ITT Technical Institutes before they closed.

The department also improved efforts to reach borrowers eligible for debt relief because of permanent disabilities, canceling $7.8 billion for more than 400,000 borrowers.

Among other efforts and repairs, the department announced measures to protect students and taxpayers from predatory or low-value colleges. The department has restored the Federal Student Aid’s enforcement office. Altogether, the new actions are expected to bring more than 3.6 million borrowers at least three years closer to receiving forgiveness through the department’s income-driven repayment program.

Sure, correcting and streamlining the flawed college loan system doesn’t come close to ending the debate. Loan forgiveness sounds a lot like another government giveaway, especially to those who have worked hard to pay off their loans without assistance.

There is a middle ground here that respects all sides. Student loans should not be a life sentence, yet for many they have been. Some parents even find they can’t help their own children much because they’re still paying off student loans of their own.

Debt relief won’t put a lid on rising tuition costs. Quite the contrary, it tends to take even more pressure off colleges and universities to provide other forms of aid to help their students.

A big part of this problem flows from the bloated rosters of administrators, associate deans, equity officers and other middle-managers and bloviators at the nation’s universities. These highly paid bureaucrats and paper pushers are far more to blame for the rising cost of college tuition than anyone actually teaching classes. We don’t want to have to pay their salaries by encouraging tuition creep through debt forgiveness.

That said, no one can deny the value of a college diploma in today’s economy and job market for those who have the initiative and perseverance to pursue one. The government has an important role to play in helping those students to achieve their dreams, certainly without waste, fraud or abuse.

Where there has been abuse, or unreasonable actions on the part of predatory institutions, there should be forgiveness. Where there is public service on the part of the graduate, there should be forgiveness, too.

But those who chose to live large while pursuing an elite and perhaps impractical degree? The piper must be paid. Fairness demands no less.

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Chicago Tribune (TNS)

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