Department of Ed Cancels Billions in Loans
The U.S. Department of Education announced that it will automatically discharge outstanding student loans for borrowers with a “total and permanent disability (TPD),” as identified through the Social Security Administration (SSA). Beginning in September 2021, over 323,000 borrowers are expected to benefit, which totals to around $5.8 billion in debt erased. Additionally, and related to TPD, the Department will no longer require borrowers to report their earnings, the failure of which results in reinstated loans.
On August 26 the Department of Ed announced that it will also forgive the loans of 115,000 borrowers who formerly attended ITT Technical Institute (ITT). The Education Department has approved $1.1 billion in relief, contributing to the new total of $9.5 billion discharged loans since the commencement of the Biden administration. This action discharges the loans for borrowers who attended ITT during a period in which the institution misrepresented its financial health and lured students into taking out unaffordable private loans. Students’ loans are discharged if the school’s closure prevented them from completing their degrees, or if borrowers withdrew their enrollment in the school within a few months of its closing.
Student borrower protection advocates offer praise for these moves, as hundreds of thousands of student loan borrowers have been trapped in a cycle of unnecessary debt.
$1.2 Trillion Infrastructure Investment Bill
On August 10, the Senate voted 69-30 to approve a $1.2 trillion infrastructure package, which includes billions of dollars for higher education. While the package includes historic investments in physical infrastructure, primarily for roads and bridges, it also offers billions in monetary support for internet, broadband, and overall digital access for students. The bill must still pass through the House of Representatives, which House Speaker Nancy Pelosi has committed to passing by September 27, 2021.
$3.5 Trillion Budget Blueprint
On August 9, Senate Democrats released a budget resolution, providing a framework for spending $3.5 trillion. In the early morning of August 11, the Senate passed the budget proposal, which, according to the framework, includes the following higher education priorities: tuition-free community college and investments in HBCUs. On August 24, the House of Representatives approved the budget blueprint with a 220-212 vote, a narrow victory with votes falling along party lines.