More colleges are canceling student debt using Biden Stimulus Funds – will the others follow?
A growing number of colleges and universities have announced in recent weeks that they will write off student debt on their graduates using funds from President Biden’s recent stimulus bill.
Elizabeth City State University in North Carolina announced last week that it would write off $ 286,500 in student debt owed directly to school due to the COVID-19 pandemic.
“The administration is aware that the COVID-19 crisis has caused financial hardship for many students and their families,” Provost Farrah J. Ward said in a statement to WAVY News. “As the pandemic and its impact continue to affect our students, we are committed to finding ways to support the Viking community during this crisis. “
The university said it would use stimulus funds from the US bailout – the $ 1.9 trillion back-up plan President Biden signed into law in March. After the bill was passed, Education Secretary Miguel Cardona updated policy guidance allowing colleges and universities to use stimulus funds for various student needs, including cancellation student debt in some cases.
“Many students have seen their post-secondary careers turned upside down as they manage their schoolwork while protecting themselves from this virus,” Education Secretary Cardona said in March when he announced the policy change. “We hope that every eligible student will take advantage of these benefits while continuing to focus on their studies.”
Elizabeth City State University isn’t the only college to write off student debt, and it may not be the last. Wilberforce University, a historically black university in Ohio, announced that it would do the same, writing off more than $ 375,000 in student debt for students enrolled in 2020 and 2021. And Delaware State University announced in May. that she would forgive over $ 700,000 in student debt. to at least 200 students facing difficulties as a result of the pandemic.
Other schools are announcing debt-free enrollment options for students to prevent them from accumulating student loans to begin with. Dartmouth College announced this week that it will eliminate student loans for families earning $ 125,000 a year or less. “Our next step is to try to increase it to $ 150,000,” Presidential Commission on Financial Aid co-chair Julie McKenna said in a statement to Dartmouth. Debt-free enrollment in Dartmouth would not be funded by stimulus funds.
It is important to note that these latest student loan cancellation initiatives relate only to debts owed directly to institutions, rather than to the government or a private lender. Yet, institutional student loan debt can be a serious problem for students and borrowers. These types of debt are generally not eligible for federal student loan relief and forgiveness programs, such as income-tested repayment, civil service loan forgiveness, or the CARES law moratorium on payments and forgiveness. interest on student loans. In addition, the non-payment of these debts can lead to serious and lasting consequences, including the retention of transcripts and the inability to re-enroll, transfer credits, complete a degree program or pursue further studies. secondary studies.
Advocates for student loan borrowers and their progressive allies in Congress continue to pressure President Biden to use executive action to enact a large-scale student loan forgiveness. Biden expressed his skepticism of such an approach. The administration is reviewing its options, however, and Biden has ordered attorneys for the U.S. Department of Education and the Department of Justice to conduct a legal review of student loan forgiveness options. This review is ongoing.
Biden administration announces major overhaul of income-based repayment and student loan forgiveness programs
Will Biden cancel student loan debt? We may know soon
Biden Student Loan Forgiveness Review: Should You Take Action Now To Write Off Student Debt Later?
If Biden doesn’t cancel student loan debt, could he do it instead?