RICHMOND (February 19, 2021) – Attorney General Mark R. Herring today joined a multistate coalition urging the adoption of U.S. House and Senate resolutions that call for the cancellation of up to $50,000 in federal student debt owed by each and every federal student loan borrower nationwide.
In their
letter to Congress, Attorney General Herring and his colleagues stress the immediate relief needed for borrowers struggling with unmanageable student loan debt, which has only been exacerbated by the COVID-19 pandemic and current financial crisis. The resolutions – Senate Resolution 46 and House Resolution 100 – call on President Biden to exercise his authority to cancel up to $50,000 in federal student loan debt per borrower.
“Hundreds of thousands of Virginians are suffering under the crippling weight of federal student loan debt, which in turn affects almost every other aspect of their lives,” said Attorney General Herring. “Black and Latinx communities in Virginia are particularly affected by the burden of student loan debt and giving them this relief could substantially increase their household income. Too often, a Virginian is held back in life because of student loan debt and it’s time they get the help they deserve.”
According to the
letter, the existing repayment system for federal student loans provides insufficient opportunity for struggling borrowers to manage their debts. As many as one in five federal student loan borrowers are in default. Options for student borrowers to obtain relief have also proven to be inadequate. Only 2 percent of borrowers who applied for loan discharges under the Public Service Loan Forgiveness program have been granted a discharge, and efforts by state attorneys general to obtain student loan discharges for students defrauded by for-profit schools have been stymied by the U.S. Department of Education.
The letter specifically highlights misconduct by for-profit schools, and how the industry’s predatory practices have disproportionately harmed people of color. Attorney General Herring and his colleagues state that cancelling federal student loan debt can substantially increase Black and Latinx household wealth and help close the racial wealth gap.
Attorney General Herring has taken major actions against for-profit colleges for misleading students. In November 2015, for-profit education company
Education Management Corporation announced it would significantly reform its recruiting and enrollment practices and forgive more than $2.29 million in loans for approximately 2,000 former students in Virginia through an agreement with the Attorney General and a group of state attorneys general. Nationwide, the agreement required the for-profit college company to forgive $102.8 million in outstanding loan debt held by more than 80,000 former students.
In December 2016, the Attorney General
announced that more than 5,000 Virginia students formerly enrolled in schools operated by Corinthian Colleges, Inc. may be eligible for loan forgiveness. This came after the U.S Department of Education found that Corinthian College and its subsidiaries published misleading job placement rates for many programs between 2010 and 2014. Following this announcement, Attorney General Herring
urged Secretary DeVos and the Department of Education to follow through on their commitment to cancel student debt for students in Virginia and around the country who were victimized by Corinthian Colleges’ practices.
Attorney General Herring
announced in January of 2019 that he and 48 other attorneys general reached a settlement with for-profit education company Career Education Corporation (CEC). The terms of the settlement required CEC to reform its recruiting and enrollment practices and forgo collecting about $493.7 million in debts owed by 179,529 students nationally. In Virginia, 3,094 students will receive relief totaling $8,022,178.
Joining Attorney General Herring in filing today’s letter are the attorneys general of Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Vermont, Washington, Wisconsin, and the District of Columbia.
February 22, 2021 @ 11:31 am
Millions of people are ‘held back’ and ‘struggling under the weight’ of rent payments, utility payments, and other costs of living. Are you cancelling all those, too? Instead, how about forcing colleges, who instigate these loans, to be more up-front and informative before the loans are taken out? How about forcing colleges to lower or do away with some of the crazy fees and add-ons? In most schools, if you stay in the dorms, you are forced to buy the meal plan, whether you use it or not. It is as much or more than the dorm fees. Our cost for that was $5K+ for the dorms, $5K+ for the meals (and keep in mind they’re only at school about 7 months) , $10K+ a year for a total of $50K. The kids never hear the facts that they’re going to be paying huge monthly payments for 10-20 years after they leave school. They’re told ‘it’s only $100 a month’. They’re not told it’s $100 a month added for each renewed loan each school year, making it $400 dollars a month. They’re encouraged by the school to take out multiple loans from different places, meaning they’re paying 2-4 separate payments at the same time. They’re told they don’t have to pay anything until after they leave school, but they aren’t aware that all that time the interest is building up, making their balance higher. They aren’t told what the total cost of the interest will be, which can be as much as the principle itself. These kids are not financial geniuses, and since they are considered adults, the parents aren’t often consulted in the wheeling and dealing. My child came out of school with $1000 a month in debt. She graduated 6 years ago, and I paid on her loans the entire time she was in school, paying more than the minimum payments, and even paying off some of the smaller loans. More than half of what I have paid went toward interest, not principle. After 10 years, we’re only half-way paid off now. Do something about the exorbitant and unnecessary high cost of education.