Elizabeth Warren calls out Jeff Bezos in her latest wealth tax campaign: ‘I’m looking at you’

Sen. Elizabeth Warren and Amazon CEO Jeff Bezos.
Sen. Elizabeth Warren and former Amazon CEO Jeff Bezos.

  • In a CNBC interview on wealth taxes, Sen. Elizabeth Warren again called out Jeff Bezos.
  • Warren has repeatedly criticized Bezos over how much he pays in taxes, especially following his space adventure.
  • Under Warren’s proposed measure, Bezos would have paid $5.7 billion in taxes in 2020.
  • See more stories on Insider’s business page.

In an interview with CNBC’s Squawk Box, Sen. Elizabeth Warren again took aim at now-earthbound billionaire Jeff Bezos in her latest push for a wealth tax.

When it comes to taxing the assets of America’s wealthiest, Warren said, “it shouldn’t make a difference whether you have real estate, or whether you have cash, or whether you have a bazillion shares of Amazon.”

“Yes, Jeff Bezos, I’m looking at you,” she said.

Warren has repeatedly taken aim at billionaire Bezos over how much he pays in taxes. ProPublica recently revealed that Bezos reportedly did not pay income taxes for two years, and that he received a $4,000 tax credit in 2011 meant for families earning under $100,000.

Earlier this week, Warren tweeted that “the richest guy on Earth can launch himself into space while over half the country lives paycheck to paycheck, nearly 43 million are saddled with student debt, and child care costs force millions out of work. He can afford to pitch in so everyone else gets a chance.”

She also criticized his comments thanking every Amazon employee and customer for funding his foray, where Bezos said “you guys paid for all of this.”

“Jeff Bezos forgot to thank all the hardworking Americans who actually paid taxes to keep this country running while he and Amazon paid nothing,” Warren tweeted.

Amazon did not immediately respond to Insider’s request for comment.

Warren has repeatedly called for a wealth tax

Warren campaigned on a wealth tax in her failed 2020 presidential run, and continues to push for legislation that targets America’s highest earners.

Under her most recent proposal, the Ultra-Millionaire Tax Act, households with a net worth of $50 million or more would see at least a 2% tax on their assets. Those with over $1 billion would have a 3% tax – what Warren called a “tiny little tax” on CNBC.

“But notice, if we put that tiny little tax in place, that would be enough to pay for universal childcare, enough to pay for our kids to be able to go to college, enough for us to pay for all of those roads and bridges and bring them into the 21st century,” Warren said.

Wealth taxes, and taxes on high-earners, have recently claimed the spotlight amidst a push to fund President Joe Biden’s infrastructure package. While Biden did not propose an outright wealth tax, some of his measures would target America’s highest earners. He also proposed increasing IRS funding, which could raise an additional $700 billion over 10 years. Those proposals came after a study from IRS researchers and academics found the top 1% of Americans fail to report about a quarter of their income to the IRS.

Per an analysis from Americans for Tax Fairness and the Institute for Policy Studies Project on Inequality found that, Bezos would have ponied up $5.7 billion in taxes in 2020 under Warren’s wealth tax.

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Elizabeth Warren took aim at Jeff Bezos, saying ‘the richest guy on Earth can launch himself into space while over half the country lives paycheck to paycheck’

Sen. Elizabeth Warren and Amazon CEO Jeff Bezos.
Sen. Elizabeth Warren and Amazon CEO Jeff Bezos.

  • Sen. Elizabeth Warren took a jab at Jeff Bezos over his recent space flight as other Americans struggle financially.
  • Warren said if the billionaire can go to space, he can afford to pay more in taxes.
  • ProPublica reported Bezos paid $0 in income taxes for at least two years from 2006-2018.
  • See more stories on Insider’s business page.

Sen. Elizabeth Warren tweeted Sunday about Jeff Bezos’s recent space flight, saying that if he can afford to go to space he can afford to pay more in taxes.

“The richest guy on Earth can launch himself into space while over half the country lives paycheck to paycheck, nearly 43 million are saddled with student debt, and child care costs force millions out of work,” Warren tweeted. “He can afford to pitch in so everyone else gets a chance.”

Jeff Bezos, the founder and former CEO of Amazon, paid $0 in federal income taxes for at least two years between 2006 and 2018, ProPublica reported in June. The bombshell report also revealed Tesla CEO Elon Musk did the same thing in 2018.

Read more: UBS lays out the 7 space stocks set to lift off in a sector it says will double in size to $900 billion by 2030 – including 1 that could soar by 40%

Insider’s Lynnley Browning reported in 2019 that Amazon also paid $0 in income taxes in 2017 and 2018.

Bezos is currently listed by Forbes as the richest person in the world, with a net worth of $209.2 billion.

The billionaire’s space exploration company Blue Origin successfully completed its first passenger space flight on Tuesday, launching Bezos and three others into space for about three minutes of weightlessness.

Warren had also taken a jab at Bezos over the flight last week, writing on Twitter: “Jeff Bezos forgot to thank all the hardworking Americans who actually paid taxes to keep this country running while he and Amazon paid nothing.”

Insider has reached out to Amazon for comment.

Have a news tip? Contact this reporter at kvlamis@insider.com.

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Senate GOP votes against their $1 trillion infrastructure deal with Biden – but say they’ll back it in just 4 more days

Mitt Romney Rob Portman
Sen. Mitt Romney (R-UT), Sen. Rob Portman (R-OH) and Sen. Roy Blunt (R-MO) ride an elevator as they leave a bipartisan meeting on infrastructure on Capitol Hill.

  • Senate Republicans voted Wednesday to oppose an infrastructure deal they struck with Biden.
  • They said they wouldn’t vote for an unfinished bill – but they’ll be prepared to do that on Monday.
  • Senate Minority Leader Mitch McConnell hasn’t thrown his backing behind the measure yet.

Senate Republicans voted against advancing the $1 trillion bipartisan infrastructure deal on Wednesday in an early vote. But a key faction called for more time and said they can support the same agreement in four days.

Republicans lined up to oppose the blueprint in a 49-51 vote on Wednesday afternoon. The measure fell short of the 60 votes needed to clear the chamber.

Senate Majority Leader Chuck Schumer said he went from a “yes” to a “no” only so he could bring up the measure again for another vote under Senate rules.

Still, Republican negotiators including Sens. Rob Portman of Ohio and Mitt Romney of Utah expressed confidence about supporting their plan on Monday once details on how to pay for it were ironed out.

The agreement contains $579 billion in fresh spending beyond what Congress has already approved focused on roads, bridges, and upgrading broadband connections. All five Republican negotiators voted against kicking off debate on the agreement they had struck with President Joe Biden last month.

It comes days after the bipartisan group jettisoned $40 billion in extra IRS funding in the bipartisan deal, as it had triggered a backlash among conservatives alarmed about the possibility of overreach by the agency.

The GOP maneuver represents a stark contrast with their Obamacare repeal efforts in 2017. At the time, most Senate Republicans voted to advance an incomplete “skinny repeal” blueprint of the Affordable Care Act, a major Republican priority. But the late Sen. John McCain ultimately cast the pivotal vote that torpedoed that effort, with an infamous thumbs-down vote.

Romney told reporters before the vote that it’ll be some time before a full infrastructure bill is drafted. “We won’t have a complete text, that’s going to take quite a while,” he said. “We’ll have elements that are written but many that are not.”

He said the bipartisan group is aiming to be fully agreed upon “the major issues” by Monday. Sen. Jon Tester of Montana, a Democrat in the talks, told reporters the group would continue fleshing out the deal by phone on Wednesday evening.

The bipartisan group put out a statement shortly after the Wednesday afternoon vote. “We have made significant progress and are close to a final agreement,” the senators said, adding they want to broker a deal “in the coming days.”

Progressives are losing patience with the slow pace of bipartisan talks. Democrats including Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez have argued for several weeks that the GOP has been given plenty of time to come onboard and warn that Republicans are attempting to only delay Democratic efforts.

“Democrats have kept the door open to Republicans for months now on infrastructure,” Warren told Insider on Tuesday. “Republicans cannot be allowed to delay progress any longer. I hope Republicans will be part of this, they’ve been given every accommodation, but it’s time to move.”

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Elizabeth Warren wants to investigate Warren Buffett and other billionaires’ tax practices – and probe the banks and wealth managers behind them

Warren Buffett
Warren Buffett.

  • Sen. Elizabeth Warren criticized Warren Buffett’s tax practices in an open letter.
  • The senator wants an investigation into how banks and wealth managers enable tax avoidance.
  • ProPublica recently reported how Buffett and other billionaires minimize their tax bills.
  • See more stories on Insider’s business page.

Billionaires aren’t paying their fair share of taxes, and the banks and wealth managers enabling them should be investigated, Sen. Elizabeth Warren and Sen. Sheldon Whitehouse said in an open letter on Wednesday.

Warren and Whitehouse wrote to Ron Wyden, the chairman of the Senate’s finance committee, after ProPublica obtained the tax records of many ultra-wealthy Americans and published some of its findings.

The lawmakers highlighted the non-profit journalism outlet’s “deeply troubling allegations” that billionaires have borrowed huge sums against their companies’ stock to fund their lavish lifestyles, then deducted the interest on those loans from their taxable income, meaning they’ve paid zero federal income tax in some years. Borrowing also spares them from having to sell stock and incur capital-gains taxes.

The senators called out Warren Buffett, the famed investor and Berkshire Hathaway CEO, for paying taxes equivalent to less than 0.1% of the $24 billion increase in his wealth in 2018. They also noted that Amazon founder Jeff Bezos claimed a $4,000 child tax credit and reported a loss on his tax return in 2011, when he was worth $18 billion.

“This tax avoidance by the nation’s wealthiest individuals is profoundly unfair,” Warren and Whitehouse wrote. The pair argued that billionaires shortchanging the government prevents it from investing in education, healthcare, infrastructure, and the environment. It also exacerbates inequality, distorts the US economy, and results in an unfair tax burden for low-income and middle-class families, they added.

While the vast majority of the ultra-wealthy’s tax practices are legal, they allow those individuals to “reap billions from their investments and live lives of privilege that are beyond the imagination of most families,” the lawmakers said.

Warren and Whitehouse called on Wyden and his committee to investigate the matter, hold hearings, and craft new laws to prevent tax avoidance. In particular, the pair urged them to investigate the large financial institutions that provide large, cheap, stock-backed loans to the super rich, letting them live on borrowed money instead of taxable income.

While the senators singled out Buffett, there’s no indication the investor borrows money to fund his relatively modest lifestyle, or has ever paid zero federal income tax. ProPublica said the billionaire minimizes his tax bill by not paying a dividend and keeping his wealth in Berkshire stock. Yet his shareholders have overwhelmingly voted against a dividend, and long-term stock ownership is a key element of Buffett’s investing philosophy.

Moreover, Buffett has called for higher taxes on the wealthy, and recently reached the halfway point in his goal of gifting 99% of his fortune to good causes.

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23 Democrats are worried about ‘plunging’ student-loan borrowers back into repayment in October without a long-term plan for protecting their wages and credit scores

college graduates
  • 23 Democrats asked the Education Dept. how it will protect borrowers’ wages when student-loan payments resume.
  • They cited how nearly half of borrowers with defaulted loans can’t return to good credit standing.
  • Democrats are worried about “plunging” the borrowers back into repayment in October without long-term help.
  • See more stories on Insider’s business page.

Even if the pause on student-loan payments does get extended past October, it would only be temporary. Lawmakers want to ensure the Education Department has plans for long-term borrower protections.

On Wednesday, Sen. Elizabeth Warren of Massachusetts, Sen. Cory Booker of New Jersey, and Rep. Ayanna Pressley of Massachusetts led 23 of their Democratic colleagues in requesting information from the Education Department on practices that “harm student borrowers.” Specifically, in their letter to Education Secretary Miguel Cardona, the lawmakers wanted to know the steps the department is taking to protect borrowers’ wages and benefits when payments resume.

“Even before the coronavirus disease 2019 (COVID-19) pandemic, collections on defaulted student loans were catastrophic for borrowers in default, who saw their wages, tax refunds, and even Social Security checks confiscated, in addition to being forced to pay exorbitant fees,” the Democrats wrote.

The letter cited a report from the Center for American Progress that found 45% of borrowers in default have not found a path to return their loan to good credit standing, which makes housing and job opportunities more difficult to land.

Democrats added that although the CARES Act initially paused student-loan payments during the pandemic, the Education Department and Treasury Department still “improperly garnished and withheld” over $200 million from about 390,000 borrowers during this time.

“The Department’s failure to fully implement the collections moratorium raises concerns about how it will handle the upcoming scheduled resumption of collections and payments on October 1, 2021,” the letter said.

The Education Department also said it would refund any wage or tax refunds collected after the pandemic began, but over 23,000 borrowers who had their wages garnished have yet to receive refunds because the department didn’t have borrowers’ correct addresses on file, according to the National Consumer Law Center, which is why the Democrats are stressing the importance of proper preparation to transition into student-loan repayment.

Many Democrats who have signed this letter are also calling for the payment pause to be extended through at least March of next year, given that both borrowers and services have said they are not prepared to resume payments in just a few months.

The lawmakers wrote: “As we near the currently scheduled end of the suspension of payments and collections, we are concerned about plunging borrowers back into an untenable financial situation, causing long-term damage to their credit and financial stability and a sudden unnecessary drag on our recovering economy.”

Read the original article on Business Insider

Student-loan companies aren’t prepared to restart payments in October, which could be a ‘financial catastrophe’ for borrowers

Elizabeth Warren
  • Elizabeth Warren asked student-loan servicers last month how they were preparing borrowers to restart payments.
  • They responded on Tuesday that they need more time, calling the transition into repayment “unprecedented.”
  • Lawmakers and advocates are calling on Biden to extend the payment freeze through next year.
  • See more stories on Insider’s business page.

The resumption of student-loan payments on October 1 is quickly approaching as borrowers, lawmakers, and advocates continue to sound the alarm on the risks with restarting payments too early.

As it turns out, the companies that collect the payments aren’t ready, either.

Last month, Sens. Elizabeth Warren of Massachusetts, Ed Markey of Massachusetts, and Tina Smith of Minnesota sent a letter to the CEOs of all student-loan servicers, requesting information on how each of them were preparing to transition borrowers back into repayment.

On Tuesday, the senators released the responses from those servicers, and the overarching theme was that servicers, along with borrowers, have concerns with restarting student-debt payments in just three months.

“The responses to our inquiry indicate that neither student loan borrowers nor student loan servicers are prepared for payments to resume, and servicers will need significant time to ensure that staffing and procedures are ready to provide borrowers with a high level of support,” the senators wrote in a letter to President Joe Biden.

One servicer even noted in its response that attempting to move over 43 million borrowers back into repayment at once is “unprecedented.”

Other main findings from the responses include:

  • The payment pause has provided significant relief to borrowers, with 2.5 million borrowers having fully repaid their loans during the pandemic;
  • Most borrowers had very little contact with their servicers during the pandemic, suggesting they will not be adequately prepared to restart payments;
  • Servicers need more time to ensure staffing is sufficient to support borrowers;
  • And transitioning borrowers from FedLoan Servicing, which recently announced it is not extending its contract, will require additional time to ensure borrowers are not harmed in the process.

Last week, the Pennsylvania Higher Education Assistance Agency (PHEAA) notified the Education Department that it would not extend its 12-year-old contract for FedLoan Servicing – which handles the loans of 8.5 million borrowers – beyond December 14. The senators wrote in their letter that attempting to restart payments only weeks after transferring servicers would “overwhelm an already broken student loan system.”

The fight to extend the payment pause continues to grow. On June 21, 64 Democrats, led by Senate Majority Leader Chuck Schumer and Warren, urged Biden in a letter to extend the payment pause until March 31, 2022, or until the economy returns to pre-pandemic employment levels, whichever is longer.

A few days later, 128 organizations, including the American Civil Liberties Union (ACLU) and Service Employees International Union (SEIU), sent a letter to the president, urging him to extend the payment pause until the administration has followed through on its promises to fix the student-loan system and cancel federal student debt.

And on June 30, Patty Murray and Bobby Scott, chairs of the Senate and House Education Committees, respectively, sent a letter to Biden urging him to extend the payment pause until early 2022 to ensure borrowers have the information they need to restart payments.

Education Department officials have also reportedly urged Biden to extend the payment pause, and while Education Secretary Miguel Cardona has not confirmed or denied whether such an extension will happen, he has hinted at the possibility of doing so.

“As the economy recovers from this unprecedented crisis, borrowers should not be faced with an administrative and financial catastrophe just as they are beginning to regain their footing,” the senators wrote. “We strongly urge you to extend the pause on student loan interest and payments in order to allow time to begin to repair the broken student loan system.”

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Tackling student debt may have just gotten easier as 4 more advocates join Biden’s ranks

joe biden elizabeth warren
President Joe Biden and Sen. Elizabeth Warren.

  • Four former Consumer Financial Protection Bureau employees just joined the Federal Student Aid office.
  • The bureau, which Elizabeth Warren helped create, fights to protect student-loan borrowers.
  • These new hires could help Warren’s agenda in cancelling student debt for all borrowers.
  • See more stories on Insider’s business page.

President Joe Biden may not have yet canceled student debt for every borrower, but new hires to his administration suggest the crisis could be inching up on his agenda.

On Monday, the Education Department announced five new hires to the Federal Student Aid (FSA) office, four of which were former employees at the Consumer Financial Protection Bureau (CFPB). Sartaj Alag, Bonnie Latreille, Kristen Donoghue, and Stephanie Richo all previously served at the CFPB, which was founded by Massachusetts Sen. Elizabeth Warren, the leading lawmaker on cancelling student debt.

“We have important work ahead of us on behalf of students, parents, and borrowers, and we are pleased to have these experienced, dedicated public servants here at Federal Student Aid,” Richard Cordray, FSA director and former CFPB head, said in a statement.

Over the past months, Biden’s administration has continued to hire experts who have fought alongside Warren in protecting borrowers and holding student-loan servicers accountable. Cordray, for example, has been a longtime ally of Warren’s and has shared much of her agenda throughout his career.

Last week, Insider reported that Toby Merrill was hired as the Education Department’s Deputy General Counsel. Merrill, along with Eileen Connor and Deanne Loonin from the Project of Predatory Student Lending, wrote a letter to Warren in 2020 affirming her legal ability to cancel student debt using executive action – something Warren is now pushing Biden to do.

The new hires announced on Monday will likely help further Warren’s agenda. Alag, who will serve as Principal Deputy Chief Operating Officer at FSA, served as the CFPB’s chief operating officer in 2018, and upon stepping down, Warren told Morning Consult in an email that his “vision and leadership” helped CFPB establish its consumer hotline, which helped process millions of complaints.

“He helped build a strong consumer agency that stands up for millions of American families,” Warren said.

And Latreille, who was formerly CFPB’s student loans ombudsman and later joined the Student Borrower Protection Center, which was founded by CFPB members to protect student-loan borrowers, is now serving as the third ombudsman in FSA’s history.

After President Donald Trump selected Mick Mulvaney to lead the CFPB, Latreille joined a few others in leaving the agency to form the Student Borrower Protection Center because its director, Seth Frotman, said at the time that Education Secretary Betsy DeVos and Mulvaney had turned their backs on “millions of borrowers drowning in student-loan debt.”

Donoghue’s ties to the CFPB go all the way back to its founding in 2013 – she was one of the bureau’s original employees and worked alongside Warren during its creation.

Also included in Monday’s new hires is Colleen McGinnis, who has worked in public service for over 20 years and will serve as FSA’s chief of staff.

While the new hires have not commented on large-scale student-debt cancellation, Warren continues to push for Biden to cancel $50,000 in debt per borrower and extend the pandemic freeze on student-loan payments in the meantime.

“About 40% of people with student loan debt weren’t able to finish their degrees-so now they’re stuck trying to pay college-graduate-sized bills on high-school-diploma-sized salaries,” Warren wrote on Twitter. “We’re fighting to #CancelStudentDebt because people need relief.”

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Elizabeth Warren demands answers from the SEC on crypto regulation by the end of July

senator elizabeth warren
  • In a letter addressed to the chairman of the SEC, Senator Elizabeth Warren demanded answers on crypto regulation by July 28.
  • Warren, who’s part of the Senate Banking Committee, is concerned about risks to consumers and investors from the $1.3 trillion market.
  • She said Congress may need to act to ensure the SEC has proper authority to close existing regulation gaps.
  • See more stories on Insider’s business page.

In a Wednesday letter addressed to SEC Chairman Gary Gensler, Sen. Elizabeth Warren demanded the agency answer a series of questions related to cryptocurrency regulation – and said she expects an answer no later than July 28.

The Massachusetts Democrat – who serves as chair of the Senate Banking Committee’s Subcommittee on Economic Policy – laid out her goal of protecting investors in the expanding market for digital currencies.

“The increased use of cryptocurrency exchanges presents unique risks to consumers,” Warren said in the letter. “Although they describe themselves as cryptocurrency ‘exchanges,’ these platforms lack the same types of basic regulatory protections as traditional national securities exchanges like the New York Stock Exchange or Nasdaq.”

Warren said the information she’s requested will help Congress determine if it needs to act to ensure the SEC has the needed authority to close existing gaps in regulation. Those gaps, she said, leave investors and consumers vulnerable to dangers in what she called a highly opaque and volatile market.

Warren also said in her letter that nearly 7,000 people in the US reported losses of $80 million from cryptocurrency scams between October 2020 and March 2021.

“The harms to consumers as a result of this under-regulated market are real and continue to proliferate in the absence of effective SEC regulations,” she said.

Warren presented five questions to the SEC, beginning with:

  1. “Do you believe that cryptocurrency exchanges are currently operating in a ‘fair, orderly, and efficient’ manner? If not, what problems has the SEC identified that are associated with the use of these exchanges?”

The cryptocurrency market this year has notched a number of milestones including exceeding a valuation of $2 trillion in April as bitcoin topped a $1 trillion market value . Those moves were made alongside the trading debut of Coinbase, the largest crypto exchange in the US. Wall Street banks and other institutions have ramped up their business exposure to the market. Meanwhile, the SEC is considering the application of 13 bitcoin ETFs.

But the cryptocurrency market’s valuation has since fallen to roughly $1.4 trillion because of a sell-off in bitcoin, ether, and other digital currencies.

Read more: A crypto evangelist shares 5 altcoins that could explode in value, including one with 100-times potential – and breaks down his 3-part strategy for betting on speculative but potentially rewarding tokens

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Biden’s Education Dept. just hired Elizabeth Warren’s student-loans expert, who studied predatory lending at Harvard

elizabeth warren
Sen. Elizabeth Warren.

  • The Education Dept. just hired Toby Merrill, founder of the Predatory Student Loan Project.
  • Elizabeth Warren cited Merrill’s research saying the president can legally cancel $50,000 in student debt.
  • She was hired as deputy general counsel under Education Sec. Miguel Cardona.
  • See more stories on Insider’s business page.

A new hire at the Education Department is another in the growing number of experts who have fought alongside Massachusetts Sen. Elizabeth Warren to reform the student-loan debt system.

Toby Merrill, founder of the Project of Predatory Student Lending at the Legal Services Center of Harvard Law School, was hired as the Education Department’s Deputy General Counsel in the Office of the General Counsel on Tuesday, according to a press release.

The Project represents low-income student-loan borrowers in predatory lending cases against for-profit schools, and according to its website, Merrill has represented borrowers in cases that resulted in almost $1 billion in student-debt cancellation. Notably, her work has caught the eye of Warren, a prominent Democrat pushing for President Joe Biden to cancel more student debt.

Another Warren ally – Richard Cordray – joined in May as the head of the Federal Student Aid office, and while he has not publicly commented on cancelling student debt, he has, like Merrill, shared much of Warren’s agenda throughout his career.

During her presidential campaign, Warren proposed to direct the Secretary of Education to cancel $50,000 in student debt per person, and Merrill, along with Eileen Connor and Deanne Loonin from the Project, wrote a letter to Warren in 2020 affirming her legal ability to cancel student debt using executive action.

“In assessing your proposal, we have consulted the statutory and regulatory framework governing federal student loan programs administered by the Department of Education, as well as the framework and controlling interpretations of the budgetary structure of these programs,” Merrill, Connor and Loonin write. “We conclude that your proposal calls for a lawful and permissible exercise of the Secretary’s authority under existing law.”

They added that “the power to create debt is generally understood to include the power to cancel it.”

Under the Higher Education Act, as Merrill, Connor, and Loonin explained, Congress gave the Education Secretary the unrestricted authority to create and cancel or modify federal student debt, and although Warren did not win the presidency, she has been urging Biden to follow through on her proposal and provide borrowers with $50,000 of student debt relief.

Whether Biden will use the authority Warren and Merrill believe he has is unclear. Although he campaigned on cancelling $10,000 in student debt, he has said he does not think he has the authority to cancel $50,000 of it, but he has asked the Education and Justice Departments to review his ability to do so.

“It’s time for President Biden to #CancelStudentDebt,” Warren wrote on Twitter. “People need this. Our country needs this. And one of the best ways to create a 21st-century economy is by investing in people who have invested in their own education.”

Do you have a story about trying to cancel student debt? Reach out to Ayelet Sheffey at asheffey@insider.com.

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The Education Dept. insists you repay all your student loans but isn’t collecting about $1 billion owed by colleges, report finds

college graduates
  • The National Student Legal Defense Network found 1,300 colleges owe $1.2 billion to the Education Dept.
  • Most of it is held for-profit colleges that shut down in past years over allegations of fraud.
  • Meanwhile, the department is preparing to resume student loan collections in October.
  • See more stories on Insider’s business page.

Once the payment pause on student loans lifts in October, the Education Department will resume efforts to collect student debt from 43 million borrowers across the country. But according to a new report, collection of debt held by higher education institutions – and owed to taxpayers – doesn’t appear to get similar treatment.

The nonprofit National Student Legal Defense Network released a report last week that found as of February 2021, nearly 1,300 higher education institutions owed approximately $1.2 billion to the Education Department. Most of the debt is held by for-profit schools, with the largest outstanding debt of over $244 billion owed by the defunct Vatterott College.

“While the Department aggressively attempts to collect from borrowers, institutions and their owners and executives walked away from more than a billion dollars owed to taxpayers,” the report said.

The report noted that even thought the department has a “wide array” of methods to require institutions to repay their debt, it has failed to make use of those tools, allowing debt to go uncollected.

Department of Education Press Secretary Kelly Leon told Insider in a statement that the department “is committed to improving our policies and practices to better hold institutions accountable for their actions and to provide borrowers with fair and streamlined access to the benefits to which they are entitled.”

Here are the other main findings from the report, obtained by the group through Freedom of Information Act requests:

  • About 200 of the 1,300 institutions with debt still received Title IV funding from the government;
  • The department has recertified institutions owing debt for participation in student aid programs;
  • And the department’s failure to collect has cost at least $218 million because the statue of limitations on collections had expired.

The report added that the department has not collected relatively small debt amounts. For example, the for-profit University of the Rockies owed $883,613 in 2019 that the department had not collected as of the data collected in the report.

President Joe Biden’s Education Department has begun to act on fraudulent behavior of for-profit schools through cancelling student debt for some defrauded borrowers. Most recently, Education Secretary Miguel Cardona cancelled student debt for 18,000 borrowers defrauded by now-defunct ITT Technical Institutes, totaling to about $500 million in debt relief.

But even as institutions still owe taxpayers billions in debt, the Education Department is preparing to transition borrowers back into repayment in October – something lawmakers have advocates are strongly urging against.

“When we organize together, fight together, and persist together, we win together,” Massachusetts Sen. Elizabeth Warren wrote on Twitter on Sunday. “We’ve all got to raise our voices and call on the Biden administration to extend the pause on student loan payments and #CancelStudentDebt.”

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