President Biden’s decision to cancel billions of student debt to former Corinthian college students increases pressure on the White House to offer greater forgiveness.
The White House has indicated that it is considering canceling up to $10,000 in student loans per borrower, and progressives view the cancellation of former Corinthian students as a focal point.
By canceling $5 billion in debt held by 560,000 former students at the now-closed college, advocates say the administration is signaling it has the authority to move forward on the issue without Congress.
Supporters say the question is whether Biden has the will.
“Voters strongly support canceling student debt for people who have been defrauded by exploitative schools,” said Marcella Mulholland, political director at the Liberal Thought Foundation and polling firm Data for Progress. “It is important that we take action to cancel the debts of those who have been exploited … and relieve them of this financial burden.”
Relief advocates argue the action could give a political boost to the White House and Democrats at a critical time before the midterm elections, but Republicans have pushed hard for debt relief. They say it amounts to taxpayers who have paid their own bills based on student tuition and have indicated they will work to use the case against Biden and Democrats in the fall.
Biden and the White House have long been debating and at times seemed close to making a decision.
It will come at a critical moment for the president.
For months, Biden has struggled with declining poll numbers, and Democrats fear it will be too difficult to turn around by November given high inflation and other hard-to-control economic issues. He is facing a mountain of domestic and international crises and is under pressure to achieve more results.
The concern is particularly intense on the left.
After building back for better, Biden’s social spending bill stalled in the Senate, progressive lawmakers tweaked their strategy to demand the president take more executive action.
The Corinthian News, first reported by The Hill, noted that Biden is answering those calls.
“We hope the Biden administration will see student debt cancellation as one of the tools to uplift struggling students, borrowers, and parents,” said Cody Hunanian, executive director of the Student Debt Crisis Center.
Hunanian called Wednesday’s announcement “a long overdue and a big win” but said more needs to be done.
“Targeted relief does not go far enough,” he said. “The president has the authority to provide meaningful student debt cancellation to millions of others and he must use that power now.”
Activists are calling for a large portion of student loans to be forgiven, ranging from $10,000 to five times that amount. Others are calling for complete cancellation.
Some believe the Corinthians are meant to be a precursor to something greater.
“I’m more optimistic,” said one activist and former senator. Bernie Sanders (I-Vt.) campaigned on repealing Biden over $10,000, the most common number. “I think we’re up.”
Others see Corinthians as a blueprint for future developments. Currently, the group loan exemption applies to all former students who attended any Corinthian College campus from the company’s founding in 1995 until its closure two decades later. By that time, she had faced several investigations and fraud lawsuits.
Braxton Broington, a spokesman for the debt pool, said the Biden administration could learn from the mistake of delaying relief for Corinthian students.
“We now see that unilateral repeal has been the most reasonable and just solution all along, and the same is true for relief at scale,” Bruington said. Biden’s next step should be the immediate cancellation of all federal student debt for all borrowers. I mean, testing student debt cancellation is not only administratively impractical, it’s simply not what racial and economic justice requires.”
The situation is particularly unique due to Vice President Harris’ long history with the college.
As a California attorney general, her office won more than $1 billion in a judgment against Corinthian for its “predatory and illegal practices.” Several years ago, lawsuits were filed alleging that Corinthian had intentionally misrepresented information to students about employment rates and that she had been engaging in misleading and false advertising and recruitment.
During a speech at the Department of Education, Harris outlined her experience successfully suing Corinthians for targeting vulnerable people through misleading advertising and marketing campaigns. She described the decision as long overdue.
“In 2016, after we got the verdict against Corinthians, I said then that the least we could do was give every Corinthian the benefit they deserved,” Harris said. “Finally, and unfortunately it took so long, that promise was finally fulfilled.”
This announcement is the second mass exit from the Biden Department of Education. In April, $238 million was approved for students who attended Marinello Beauty Schools, another for-profit higher education network.
So far, the administration has offered $25 billion in loan forgiveness since January 2021. The White House insists it’s done a lot for borrowers, including extending the pandemic-related moratorium that ran throughout Biden’s first term.
While many on the left argue that the goal of tolerance is not just a political goal – they see it as an issue of economic and racial justice – they also hope it will help their party and try to convince other skeptical Democrats that it is a win-win situation.
“This could build momentum for widespread cancellation,” Mulholland said.