Biden’s administration just canceled $55.6 million in student debt for people who went to 3 for-profit colleges

college graduation
  • Biden canceled $55.6 million in student debt for borrowers who went to 3 for-profit schools.
  • 1,800 borrowers who went to Westwood College, Marinello Schools of Beauty, and the Court Reporting Institute will receive relief.
  • This brings Biden’s total debt cancellation for defrauded borrowers to $1.5 billion for 92,000 people.
  • See more stories on Insider’s business page.

President Joe Biden’s Education Department on Friday made progress in its promise to reform the student-debt system by canceling student debt for three more groups of defrauded borrowers.

The Education Department announced on Friday that it had approved borrower defense claims from 1,800 borrowers who attended the for-profits Westwood College, Marinello Schools of Beauty, and the Court Reporting Institute, resulting in approximately $55.6 million in relief.

“Today’s announcement continues the U.S. Department of Education’s commitment to standing up for students whose colleges took advantage of them,” Education Secretary Miguel Cardona said in a statement. “The Department will continue doing its part to review and approve borrower defense claims quickly and fairly so that borrowers receive the relief that they need and deserve.”

According to the press release, this is the first time the department has announced approved borrower defense claims for students who attended for-profit institutions other than ITT Technical Institutes, Corinthian Colleges, and American Career Institute since 2017.

The debt-cancellation methodology created under Education Secretary Betsy DeVos, known as the “borrower defense to repayment, compares the median earnings of graduates with debt-relief claims to the median earnings of graduates in comparable programs. The bigger the difference, the more relief the applicant would receive.

While President Barack Obama’s Administration approved 99.2% of claims by defrauded borrowers, President Trump’s Education Secretary Betsy DeVos denied 99.4% of those filed during her tenure. DeVos’ method ran up a huge backlog of claims from eligible defrauded borrowers seeking student debt forgiveness; Cardona said that process did not result in appropriate relief determination and needed to be reversed.

With regards to Westwood College, the department found that from 2002 to the college’s closure in 2015, the school misrepresented students’ abilities to transfer credits and misled students in finding appropriate career choices, leaving students “worse off” after attending the school. 1,600 of those students are receiving $53 million in debt relief.

The department also found that Marinello Schools of Beauty “made widespread, substantial misrepresentations” on the type of education they offered, and 200 of those students will receive $2.2 million debt relief, and it found that the Court Reporting Institute misrepresented how long it would take students to complete the program, resulting in 18 of those students receiving $340,000 in debt relief.

This brings total loan cancellation based on borrower defense under Biden to over $1.5 billion for nearly 92,000 borrowers.

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Biden’s Education Department just cancelled $500 million of student debt for 18,000 defrauded borrowers

1024px ITT_Technical_Institute_campus_Canton_Michigan.JPG
The ITT Technical Institute campus in Canton, Michigan.

  • The Education Dept. cancelled student debt for 18,000 borrowers defrauded by ITT Technical Institutes.
  • ITT Tech shut down in 2016 amid accusations it persuaded students to take out loans they couldn’t repay.
  • 90,000 defrauded borrowers have now received debt relief under Biden totaling $1.5 million.
  • See more stories on Insider’s business page.

As one of his first actions as Education Secretary, Miguel Cardona cancelled student debt for about 72,000 borrowers defrauded by for-profit schools. On Wednesday, 18,000 more got student-debt relief.

The Education Department announced in a press release that it had approved 18,000 borrower defense to repayment claims for borrowers who attended ITT Technical Institutes – a for-profit school that shut down in 2016 amid accusations of false advertising that persuaded borrowers to take out student loans. Those borrowers will get 100% of their student debt forgiven, totaling approximately $500 million in relief.

“Our action today will give thousands of borrowers a fresh start and the relief they deserve after ITT repeatedly lied to them,” Cardona said in a statement.

He continued: “Today’s action is part of the Biden-Harris Administration’s continued commitment to stand up for borrowers when their institutions take advantage of them. Many of these borrowers have waited a long time for relief, and we need to work swiftly to render decisions for those whose claims are still pending. This work also emphasizes the need for ongoing accountability so that institutions will never be able to commit this kind of widespread deception again.”

The department will begin notifying borrowers of their approvals for loan forgiveness in the coming weeks and will work quickly to discharge those borrowers’ loan balances.

Issues with borrower defense claims

Former Education Secretary Betsy DeVos approved a debt-cancellation methodology during the Trump administration known as the “borrower defense to repayment” to give defrauded borrowers student debt relief. It compared the median earnings of graduates with debt-relief claims to the median earnings of graduates in comparable programs, and the bigger the difference, the more relief the applicant would receive.

But compared to a 99.2% approval rate for defrauded claims filed under former President Barack Obama, DeVos oversaw a 99.4% denial rate for borrowers and ran up a huge backlog of claims from eligible defrauded borrowers seeking student-debt forgiveness. A judge recently ruled that DeVos must testify over why so few borrowers were approved for loan forgiveness.

The press release said that Wednesday’s actions bring total student loan cancellation under borrower defense by the Biden administration t0 $1.5 million for around 90,000 borrowers.

ITT Tech’s shutdown

In March, Insider reported on five of the biggest for-profit schools that were accused of defrauding their students, with ITT Tech being one of them.

The Securities and Exchange Commission had taken ITT to court in 2015 for deceiving investors about high rates of late payment and defaults on student loans, and in 2016, the government cut off ITT’s access to millions of dollars in federal loans and grants. The institution shut down shortly afterward, ending its 50-year history.

The Education Department’s recently released regulatory agenda includes amending the borrower defense to repayment, but a department spokesperson told Insider it does not yet have a timeline for when those amendments will be implemented.

The spokesperson said: “The Administration is committed to ensuring borrowers are able to access the loan relief to which they are entitled, and we look forward to working with the field to design and implement much-needed improvements.”

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Biden’s Education Dept. just laid out its priorities for student-loan relief – they’re vague

Joe Biden
President Joe Biden.

  • Biden’s regulatory agenda, released on Friday, includes student-loan forgiveness proposals.
  • The Education Dept. plans to improve loan forgiveness programs by 2022, but details are vague.
  • Democrats and borrowers continue to push for immediate debt relief while Biden is reluctant.
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From fighting the climate crisis to strengthening protections against racial discrimination, President Joe Biden’s regulatory agenda released on Friday covers a lot of ground. Significantly, unlike his budget, it even mentions student-loan forgiveness. But for borrowers waiting for clarity on what will happen to their debt loads, the details are scanty.

The list of regulatory actions, typically released twice a year, outlines how Biden plans to advance his agenda through each federal agency.

According to the Education Department’s page, Biden’s agenda includes “improving student loan cancellation authorities” in which Education Secretary Miguel Cardona will “amend regulations to improve borrower eligibility, application requirements and processes” for borrowers who meet loan cancellation criteria like being totally and permanently disabled, or attending a recently closed school.

The department also said it would review the Public Service Loan Forgiveness (PSLF) program and “plans to look at these regulations for improvements,” along with amending the “borrower defense to repayment,” which forgives loans for students who were defrauded by for-profit schools.

The department plans to finalize the rules by April 2022.

“The last four years offered a clear lesson on what happens when the executive branch fails to uphold its responsibility to protect the American people,” Sharon Block, acting administrator of the White House regulations office, said in a statement. “Our first regulatory agenda demonstrates our commitment to reversing this trend.”

At the end of May, the Education Department announced it was beginning the process of issuing new higher-education regulations, and the Friday list affirmed those plans. But no further detail was provided on what the mentioned improvements would look like.

When reached for further clarification on these regulatory actions, a department spokesperson told Insider that the agency is currently seeking stakeholder feedback on both its initial list of topics and other matters. After it conducts public hearings, it will determine a path forward on rulemaking. It did not disclose a timeline for that rulemaking, or what the additional topics entailed.

“The Administration is committed to ensuring borrowers are able to access the loan relief to which they are entitled, and we look forward to working with the field to design and implement much-needed improvements,” the spokesperson said.

But borrowers and lawmakers are growing frustrated with the timeline for giving eligible borrowers student-loan forgiveness.

Biden campaigned on reforming PSLF, which allows government and nonprofit employees with federally backed student loans to apply for loan forgiveness after proof of 120 monthly payments under a qualifying repayment plan.

However, flaws in the program have been ongoing for years. 98% of borrowers have been rejected from the program, prompting 56 Democrats to urge Cardona to fix the program in early May, and Education Secretary Betsy DeVos was sued multiple times over the program’s high denial rate.

Borrowers had similar issues with the borrower defense to repayment. Over the past decade, several for-profit schools have shut down over investigations claiming the schools engaged in fraudulent behavior related to federal loans, leading President Barack Obama to establish the program to forgive student debt for eligible defrauded borrowers.

Under Obama, the program had a 99.2% approval rate, but when DeVos took over, 99.4% of eligible borrowers were denied from the program, and she will soon testify over why that happened.

So while the department’s plans to review those programs are promising for borrowers, specific details are unclear. That’s why Massachusetts Sen. Elizabeth Warren and other Democrats are calling on Biden to cancel $50,000 in student debt per borrower to provide immediate relief.

“The time is now,” Warren told Insider on Tuesday. “We know what the problem is: student loan debt is holding back tens of millions of people across this country. People who can’t buy homes, people who can’t buy cars, people who can’t start small businesses. We need to cancel that student loan debt, not only for those people individually, but for our whole economy.”

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Trump’s billionaire education secretary is accused of denying student-loan forgiveness to thousands. Now she’ll testify over it.

Betsy DeVos
Betsy DeVos.

  • A judge ruled Betsy DeVos must testify in a case brought on by 160,000 defrauded students.
  • The students claim DeVos mishandled a program to forgive loans for students defrauded by for-profit schools.
  • Under Obama, the program had a 99.2% approval rate, but under DeVos, 99.4% of applicants were denied.
  • See more stories on Insider’s business page.

As Education Secretary under President Donald Trump, Betsy DeVos was tasked with overseeing the loan forgiveness program for students defrauded by for-profit schools. But thousands of those students claim they didn’t get the relief they deserved and have sued DeVos for her mishandling of the program.

A judge just ruled that DeVos has to testify in court about it.

The Biden administration didn’t want this to happen. In February, it joined DeVos in fighting a subpoena to testify in the lawsuit filed by about 160,000 defrauded students, arguing it was an “extraordinary request.” But on Wednesday, Judge William Alsup wrote in a 12-page ruling that her testimony was warranted given the “sparse” documentation of DeVos’ reasoning for rejecting borrowers’ claims.

“Even assuming Secretary DeVos retains some measure of executive prerogative, she must answer an appropriately issued subpoena,” Alsup wrote in the ruling. “Judicial process runs even to unwilling executives.”

Over the past decade, several for-profit schools have shut down over investigations claiming the schools engaged in fraudulent behavior related to federal loans. Corinthian Colleges and ITT Technical Institutes were two of the biggest schools accused of violating federal law by persuading their students to take out loans they could not pay back. They both shut down, as did other for-profit companies, such as Education Corporation of America.

DeVos, an heir to the AmWay fortune and member of one of America’s richest families, per Forbes, oversaw the “borrower defense to repayment” program to forgive debt for eligible defrauded borrowers, but the program massively failed. Compared to a 99.2% approval rate for claims filed under President Barack Obama, DeVos had a 99.4% denial rate for borrowers, and ran up a huge backlog of claims from eligible defrauded borrowers seeking student debt forgiveness.

Under DeVos, the program began to compare the median earnings of graduates with debt-relief claims to the median earnings of graduates in comparable programs, and the bigger the difference, the more relief the applicant would receive.

The high denial rate alarmed lawmakers, advocates, and borrowers who wanted student debt relief but weren’t getting any, and as Alsup said in his ruling, DeVos did not provide a sufficient explanation as to why so few claims were processed.

In March, Biden’s Education Secretary Miguel Cardona canceled $1 billion in student debt for about 72,000 defrauded borrowers and said in a statement that DeVos’ methodology for giving defrauded students debt relief had been ineffective and needed to be reversed.

“Borrowers deserve a simplified and fair path to relief when they have been harmed by their institution’s misconduct,” Cardona said in a statement. “A close review of these claims and the associated evidence showed these borrowers have been harmed and we will grant them a fresh start from their debt.”

Critics of DeVos’ appointment had argued that her financial ties were a conflict of interest, as she never sold her multimillion-dollar stake in Neurocore, a “brain training” program for children. She is also a longtime advocate of “school choice,” or vouchers that enable parents to send their children to private schools instead of public ones.

DeVos has separately asked the Georgia-based 11th Circuit Court of Appeals to block the subpoena. Alsup has scheduled a hearing for June 3.

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Biden’s Education Secretary allows undocumented college students to access stimulus funds

Advocates for immigrants with Deferred Action for Childhood Arrivals, or DACA, rally in front of the Supreme Court June 15, 2020 in Washington, DC.

  • Education Sec. Miguel Cardona said undocumented and international students can now receive stimulus aid.
  • This lifts a Trump-era policy that banned those students from receiving emergency aid.
  • The top Republican on House Education called it an insult while Senate Education’s top Democrat is relieved.
  • See more stories on Insider’s business page.

President Joe Biden’s $1.9 trillion stimulus package included nearly $36 billion in emergency funding for struggling students, but international and undocumented students were ineligible to receive that aid – until now.

Secretary of Education Miguel Cardona just eliminated that rule.

“The pandemic didn’t discriminate on students,” Cardona said in a press call on Monday. “We know that the final rule will include all students, and we want to make sure that all students have an opportunity to have access to funds to help get them back on track.”

On Tuesday, the Biden administration issued a final rule that revised a Trump-era policy barring international and undocumented students from accessing emergency aid. In June, Trump’s Education Secretary Betsy DeVos had issued a rule stating only those who participate in federal student aid programs can receive stimulus money that shut out undocumented and international students, including those protected under the Deferred Action for Childhood Arrival program, also known as “Dreamers.”

DeVos’ rule also initially barred students who defaulted on student loans and those convicted of minor drug crimes from receiving aid, but that was lifted in January.

Cardona said during the call that the final rule will apply to all three rounds of stimulus funding and will ensure every student who needs it can access aid.

“What this does is really simplify the definition of a student,” Cardona said. “It makes it easier for colleges to administer the program and get the money in the hands of students sooner.”

DeVos’ policy met a number of legal challenges, including an ongoing lawsuit initiated by California Community Colleges that said they have kept millions of dollars received for grants because of DeVos’ limits on who is eligible to receive them.

Rep. Virginia Foxx – the top Republican on the House Education Committee – called it “an insult to every American.”

“President Biden is fueling an immigration crisis, and this final rule exacerbates the emergency at the southern border,” Foxx said in a statement. “I call on elected Democrats to stop swindling law-abiding citizens, put Americans first, and respect the sacrifice of hardworking taxpayers.”

But Chair of the Senate Education Committee Patty Murray said in a statement she was “relieved” Cardona took this step to give every struggling student needed aid.

Separately, the Education Department said in a Tuesday press release that it is now making available $36 billion in grants that will help over 5,000 institutions, including Historically Black Colleges and Universities (HBCUs), Tribally Controlled College or University, and Hispanic Serving Institutions.

“These funds are critical to ensuring that all of our nation’s students – particularly those disproportionately impacted by the COVID-19 pandemic – have the opportunity to enroll, continue their education, graduate, and pursue their careers,” Cardona said in a statement. “With this action, thousands of institutions will be able to provide direct relief to students who need it most, so we can make sure that we not only recover from the pandemic, but also build back even stronger than before.”

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The Elizabeth Warren ally just picked to oversee US student loans could help make her debt-cancelation dream come true

Elizabeth Warren
Sen. Elizabeth Warren (D-MA).

  • Former CFPB head Richard Cordray will lead the Federal Student Aid office, which oversees student debt.
  • Elizabeth Warren helped create the CFPB and was key in nominating Cordray when she couldn’t helm the agency.
  • Warren wants to cancel $50,000 in student debt per person and Cordray has shared her agenda for much of his political career.
  • See more stories on Insider’s business page.

Since she was elected to the Senate almost a decade ago, Elizabeth Warren has been fighting to cancel student debt and hold loan servicers accountable. Now one of her closest allies is in charge of the federal student debt pile, and that could be a big deal.

Richard Cordray, the former head of the Consumer Financial Protection Bureau (CFPB), was selected to head the Education Department’s Office of Federal Student Aid (FSA) on Monday. Few people in Washington DC are better placed to carry out Warren’s vision of mass student-debt relief. That’s because Cordray took the job Democrats wanted Warren to have.

When Warren was a Harvard professor (and occasional blogger), she frequently cited problems within the student-loan system and the need to create something like the CFPB, which would protect consumers financially and ensures they are being treated fairly. That turned into a new federal agency created under President Barack Obama, who wanted Warren to lead it, but in 2011, Senate Republicans blocked her appointment. She ran for Senate instead, becoming a national figure, while Cordray became a close ally as the first head of the CFPB.

During her time in the Senate, Warren worked with Cordray’s bureau to conduct investigations into predatory lending practices. Now as head of the FSA, Cordray will be tasked with overseeing the government’s $1.5 trillion student loan portfolio through disbursing loans and grants, along with monitoring student-loan servicers and implementing relief and repayment programs.

@RichCordray was a fearless @CFPB leader who forced big financial institutions to return $12 billion to people they cheated,” Warren wrote on Twitter on Monday. “I’m very glad he’ll be protecting student borrowers and bringing much-needed accountability to the federal student loan program.”

Richard Cordray.

What Cordray could do on student debt

In a statement after his appointment was announced, Cordray said he was looking forward to creating “more pathways for students to graduate and get ahead, not be burdened by insurmountable debt.”

He will be tasked with sorting through claims from thousands of defrauded borrowers who filed for debt relief, along with ensuring the smooth implementation of loan collections once the pause on student loan payments through September is lifted – although Cardona said on Monday that extending the payment pause is “not out of the question.

While Cordray has not yet commented on wiping out $50,000 in student debt for each borrower, which Democrats continue to call for, he told MarketWatch last year that under the Biden administration, he expected the CFPB and the Education Department to work more closely on student-loan issues.

At the CFPB during the Obama years, Cordray made oversight of student loan servicers his priority. The agency has returned more than $75o million to student loan borrowers since 2011 over debt collection complaints, and in early 2017, the bureau sued Navient, the largest student loan servicer in the US, in a lawsuit that is still ongoing, arguing that Navient misled students into taking on loans they cannot pay off.

At a late April hearing, Warren called for the government to fire Navient, and for Navient to fire its chief executive officer, after accusing Navient for over a decade of abusing the student loan system.

In 2019, Cordray wrote a guest essay in The Plain Dealer, an Ohio newspaper, speaking out against for-profit colleges. “I hate how these hollowed-out businesses and subpar colleges are cheating consumers, employees and whole communities,” Cordray wrote.

Education Secretary Miguel Cardona has already canceled some debt for borrowers defrauded by for-profit schools, and Warren has conducted numerous investigations into the failures of the for-profits Corinthian Colleges and ITT Technical Institutes.

The FSA head’s seat has been vacant since March, when Mark Brown, former head of the office appointed by Education Secretary Betsy DeVos in 2019, resigned amid pressure from labor groups and lawmakers. Warren wrote in a tweet that his resignation was “good for student borrowers.”

Cordray told Marketwatch in November that, as CFPB head, his approach with the Education Department had been one of “close cooperation” but “that was all nixed when Betsy DeVos came into office.” Speaking of the outlook for a Biden administration, he said he thought the CFPB and Education Department would likely go back to working closely together.

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15 major labor unions want Biden to cancel all student debt for public service workers, report says

joe biden
President Joe Biden.

  • 15 labor unions called on the DOE to fully cancel student debt for public service workers through executive action.
  • They cited problems with the Public Service Loan Forgiveness program, in which 98% of applicants were rejected.
  • This follows Biden’s request for the DOE to prepare a memo on his authority to cancel up to $50,000 in debt per person.
  • See more stories on Insider’s business page.

Student-debt cancelation was a major theme of the 2020 presidential campaign, and the issue is only gaining momentum. On Thursday, 15 of the largest labor unions in the country called on Education Secretary Miguel Cardona to fully erase debt for borrowers who have worked in public service for more than a decade.

According to a letter obtained by Politico, the National Education Association, the nation’s largest teachers’ union, led 14 other unions representing more than 10 million public service workers in calling for full student debt cancelation. The letter said the Public Service Loan Forgiveness program has been so mismanaged that 98% of applicants for the program were rejected.

“The COVID-19 pandemic underscores the need for immediate action,” the letter said. “Public service workers who should have already benefited from the Department of Education’s Public Service Loan Forgiveness (PSLF) program are serving on the front lines of our pandemic response – caring for patients, teaching our students, and delivering essential services in communities across the country.”

The letter, which was also signed by the Service Employees International Union and the American Federation of Government Employees, said the federal government has “fundamentally failed” public service workers because of difficulties in navigating the PSLF program.

To qualify for PSLF, a borrower must be employed by a federal, state, local, or nonprofit organization, work full-time, and have direct loans. However, a 2020 report from The American Federation of Teachers and the Student Borrower Protection Center found that due to poor communication from the DOE, only 1% of eligible borrowers were approved for loan forgiveness.

Democratic lawmakers have criticized Education Secretary Betsy DeVos’ oversight of the program, and in 2019, Sen. Elizabeth Warren of Massachusetts, along with other Democratic senators, wrote a letter to the Consumer Financial Protection Bureau requesting further information on PSLF oversight.

“Though one of the primary functions of the CFPB is to regulate the student loan industry, they have failed to adequately address these claims,” the letter said. “In particular, we are concerned that CFPB leadership has rolled back its supervision and enforcement activities related to federal student loan servicers. This suggests a shocking disregard for the financial wellbeing of our nation’s public servants, including teachers, first responders, and members of the military.”

Biden vowed to fix the PSLF program during his campaign, but given its mismanagement, unions want the DOE to use its emergency powers during the pandemic to carry out the loan forgiveness.

In terms of using executive authority, White House Chief of Staff Ron Klain said on Thursday that Biden asked Cardona to prepare a memo looking into his authority to cancel $50,000 in student debt through executive action, which follows Biden’s request to the Justice Department to review his authority to do so. Warren campaigned on the issue of canceling $50,000 per person, while Biden set a $10,000 figure and he has since been repeatedly pressured to revise that upward.

Cardona has already acted to cancel debt for about 72,000 borrowers defrauded by for-profit schools, along with over 41,000 borrowers with disabilities. He also expanded the scope of the pause on loan payments to apply to 1.14 million borrowers with private loans under the Federal Family Education Loan (FFEL) Program.

The DOE has not yet commented on the unions’ request.

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Biden eyes trashing Trump-era rules that advocates feared would silence sexual assault survivors on college campuses

Betsy Devos
US Secretary of Education Betsy DeVos speaks as Vice President Mike Pence listens during a White House Coronavirus Task Force press briefing at the US Department of Education July 8, 2020 in Washington, DC.

  • Biden is directing the Education Department to review policies about sexual assault on college campuses.
  • The controversial policies were instituted under Trump by Betsy DeVos.
  • The president will direct the Education Department to determine if the rules mesh with his policies.
  • Visit the Business section of Insider for more stories.

President Joe Biden on Monday will sign an executive order directing the Department of Education to review policy changes concerning sexual assault on college campuses that were implemented under former President Donald Trump, asking officials to determine whether the policies align with his administration’s goals. 

According to The Washington Post, senior administration officials confirmed Sunday that Biden planned to sign an executive order on Monday that directed a thorough review of the rules implemented during the final year of the Trump administration. 

The move could be the start of the Biden administration’s attempt at replacing the rules with its own, according to the Post.

The changes, engineered by former Education Secretary Betsy DeVos, were widely denounced by progressives, women’s rights organizations, and other groups that advocate for survivors of sexual assault and harassment. DeVos first announced her intention to make the policy changes in 2018, but the rules weren’t finalized until last year.

The rules no longer permitted a single individual at a university or college to investigate and make a ruling concerning claims of sexual assault or harassment and instead required institutions to use a model where that allowed the accused person to cross-examine the accuser in a live hearing in a more judicial-style proceeding, according to Washington Post.

While proponents of the change said it gave accused persons more due process rights, critics feared it would discourage survivors from coming forward with allegations of assault or harassment. Colleges and universities that were required to make changes based on the rules also opposed the changes.

Democratic attorneys general in more than a dozen states filed a federal lawsuit last year opposing the new rules. The American Civil Liberties Union also last year sued to block the changes from taking effect, predicting the new rules could result in 32% fewer reports of sexual harassment and assault at four-year institutions.

The executive order is also expected to direct a review of other Education Department policies to “guarantee education free from sexual violence,” administration officials told The Washington Post.

Biden’s executive order comes on International Women’s Day, and the president is expected to take a number of other executive actions in honor of the holiday, including his establishment of a White House Gender Policy Council to combat systemic issues of equality for women both domestically and abroad, USA Today reported.

The Gender Policy Council will also focus on transgender issues and supporting women of color, according to the report.

The president is expected to unveil these orders during a speech later Monday.

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Outgoing Secretary of Education Betsy DeVos urged against student loan forgiveness in letter to Congress

U.S. Education Secretary Betsy Devos speaks during a White House coronavirus disease (COVID-19) task force briefing at the U.S. Education Department in Washington, U.S., July 8, 2020. REUTERS/Carlos Barria
U.S. Education Secretary Betsy Devos speaks at White House coronavirus task force briefing at the Education Department in Washington

  • Outgoing Secretary of Education Betsy DeVos advised Congress to vote against student loan forgiveness, according to a letter obtained by CBS News and Politico.
  • “Across-the-board forgiveness of college debts is not only unfair to most Americans, it is also the most regressive of policy proposals – rewarding the wealthiest sector of our labor force at the expense of the poorest,” she wrote.
  • In the apparent farewell letter addressed to Senate Majority Leader Mitch McConnell, DeVos outlined a number of education policies, including allocating direct federal funding to students
  • Visit Business Insider’s homepage for more stories.

Outgoing Secretary of Education Betsy DeVos advised against student loan forgiveness in a letter sent to Congress Monday, which was obtained by CBS News and Politico.

In what appeared to be a farewell letter to Senate Majority Leader Mitch McConnell, DeVos reflected “on the past four years and the conversations we have had together” and shared some “closing thoughts” with the Kentucky senator.

DeVos outlined a number of talking points in the letter, including considering allocating direct federal funding to students.

“Let me urge you instead to provide for students the opportunity to pursue meaningful, challenging, and rewarding learning opportunities,” DeVos wrote. “Let me encourage you to fund education – that is, learning – not a Department of Education. Let me urge you to fund students, not school buildings.”

She also dismissed student loan forgiveness in the letter – a policy in which President-elect Joe Biden has expressed support during his upcoming term. Biden has previously proposed making undergraduate education free in some cases and expanding college federal loan programs. He also suggested giving student loan borrowers $10,000 in loan forgiveness as part of coronavirus relief.

Read more: What a Biden presidency could mean for America’s student-loan debt crisis

DeVos, in contrast, urged Congress to reject such a proposal.

“Importantly, I hope you also reject misguided calls to make college ‘free’ and require the two-thirds of Americans who didn’t take on student debt or who responsibly paid off their student loans to pay for the loans of those who have not done the same,” she wrote in the letter.

“Across-the-board forgiveness of college debts is not only unfair to most Americans, it is also the most regressive of policy proposals – rewarding the wealthiest sector of our labor force at the expense of the poorest,” she continued.

In December, DeVos extended student loan forbearance through the end of January. Previously, more than 40 million student loan borrowers in the US weren’t expected to make payments again until the end of 2020, setting up a complicated situation for both borrowers and the incoming Biden administration.

Though student loan forbearance is set to expire at the end of the month, the bipartisan $908 billion coronavirus relief package signed by President Donald Trump does not include additional forbearance. It is not immediately clear what the incoming Biden administration will do with regards to the policy from the time he is inaugurated on January 20 to its expiration date on January 31.

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