Biden Cancelling Student Loan Debt Worth $5.8 Billion For Some
The Biden Administration announced it will cancel billions worth of student loan debt for those who attended Corinthian colleges.
The Biden Administration has announced that they are canceling student loan debt for students who attended Corinthian Colleges. This move will relieve over half a million students of their college debt, and cost an estimated $5.8 billion. It is the most costly debt forgiveness action carried out by the United States federal government, but is not a standard case of students seeking debt relief. It follows a long legal battle against the universities — which have been shut down for misleading students and the federal government.
For years now students have complained about the costs of college and the debt incurred to obtain a degree, leading up to the scandal involving Corinthian Colleges. Many parents, teachers, and employers have impressed the idea that students have to go to college to be successful. Unfortunately, as colleges expanded and online universities opened, many began offering a variety of degree programs that hold very little real-world job potential in addition to requiring more classes that are unrelated to the areas of interest that students are studying. Cornerstone, capstone classes, and a bevy of electives drive the cost of a higher education up without offering students more hiring potential. In addition, not all colleges are created equal. Many online schools are not accredited, and some have even been accused of predatory behavior. Although Corinthian Colleges was accredited, plenty of evidence signified that they preyed on unsuspecting students and mishandled the funds.
Corinthian Colleges was sued by the federal Consumer Financial Protection Bureau (CFPB) in 2014. The school was accused of predatory lending schemes, and the CFPB was originally seeking $500 million in damages for students who were victims of a predatory scheme, but somewhere along the way the U.S. Department of Justice got involved as they found that the school mishandled funds in 2015. Federal Investigators uncovered evidence which indicated that some balances for education loans were never fully paid out to the students. It was around this time that the school also filed for chapter 11 bankruptcy. How these schools were allowed to operate and keep their accreditation for so long is a mystery.
Because the schools were operated by various individuals, punishing all those involved was tricky. Corinthian Colleges were shut down in 2015 when the Department of Education acknowledged that the institutions misled students and the federal government, but no fraud convictions were made. Much like the bank bailouts of 2008, the federal government is now shoving the burden off onto taxpayers instead of individually pressing charges against everyone involved in this education scheme.
Both the students involved and taxpayers will share the burden of victimhood as the national debt continues to climb and colleges continue to require students to enroll in classes that have nothing to do with their degree program. What Corinthian Colleges did and how it has been handled is being swept aside so The Biden Administration can appease pop culture and claim victory over student debt, but the students involved deserve more. Until colleges update their degree programs that work with students and families to lower the cost of tuition without losing mass profits, young adults will still have to consider taking on massive debt or seek alternative options.
College enrollment has been declining for years, even before the pandemic. Interest in trade schools and on-the-job training programs is rising. Now that the students harmed by Corinthian Colleges’ dishonest practices have finally been given relief, the hope is that preventing student debt overload will become a goal instead of canceling it.
