By: Emil Guillermo
Don’t be confused about the student loan forgiveness plan President Biden announced recently. Sure, it wasn’t all student debt. But it did address the most egregious debt foisted on students by for-profit predator “educators.” The plan would also definitely help BIPOC borrowers more than not.
And yet, days after the announcement, people are questioning the idea from the Left and the Right.
The Left wants no limits, all debt relieved. The Right wants none of it, and asks “Who’s going to pay for it all?” Of course, they don’t ask that when it was mostly the rich who benefited from Trump tax cuts or COVID PPP payouts.
Bottom-line, we can’t let Joe Biden be talked out of student loan relief up to $10,000 for individuals, with an additional amount for those with Pell Grants.
This plan is focused on regular folks, single people with incomes under $125,000, and married folks with incomes under $250,000.
The plan is also ready-made for BIPOC communities who have suffered specifically from private, for-profit schools. Schools which follow a pattern — preying on peoples’ dreams, getting them to take out expensive student loans, that only result in debt, no degree, and busted dreams.
That was how many private, for-profit schools like Corinthian College and ITT Technical Institute preyed on unwary borrowers, resulting in massive debt forgiveness plans for their students before the general forgiveness plan was announced.
Just this week, the Department of Education announced another $1.5 billion debt relief package for 79,000 borrowers who attended Westwood College. Closed down in 2016, Westwood left students holding the bag until the feds came up with a debt package on Monday.
“Westwood operated a culture of false promises, lies and manipulation in order to profit off student debt that burdened borrowers long after Westwood closed,” said Education Undersecretary James Kvaal in a statement.
With evidence from state attorneys general in Colorado and Illinois, the Dept of Education described how Westwood “routinely misled prospective students by grossly misrepresenting that its credentials would benefit their career prospects and earning potential.”
Specifically, the school promised students jobs in their fields within six months of graduation that would “make them employable the rest of their lives.” Everything was inflated, like a “guarantee of employment pledge” that was never made good.
Sound like any of the for-profit schools that have hooked someone you know to sign up for classes in a business park campus off a highway after taking out a hefty student loan?
Sure, there are schools like the Cal State East Bays and the Laney Colleges, state colleges and junior colleges respectively. They are solid public-non-profit institutions. There are also the expensive traditional private schools like Stanford where people have loans out. The Biden-Harris plan will cover between $10,000-$20,000 of all those loans (including Parent-Plus loans) from those schools.
But for the most part we are talking about predator “private, for-profit” colleges, not the kind of schools that teach you the humanities like history or poetry.
And they sure took many a BIPOC student for a ride.
A Brookings Institute study in 2018 took a long view on student borrowing going back to 1995-96. It found that for-profit borrowers default at twice the rate of public two-year borrowers (52 versus 26% after 12 years). Overall, it found the for-profit students were more likely to borrow and had a default rate four times that of public two-year entrants.
The study also found that student and institutional factors determined default rates. And that debt and default rates among Black college students was at a “crisis level.”
Black BA graduates default at five times the rate of white BA graduates and are more likely to default than white dropouts.
As for the institution, out of 100 students who ever attended a for-profit, 23 defaulted within 12 years of starting college in the 1996 cohort compared to 43 in 2004.
The culprit is clearly predator for-profit schools. If you know someone in debt to those types of schools, let them know the Biden-Harris plan promises some relief.
This isn’t about the moral failings of student borrowers.
This is more about the moral failings of the for-profit predators and holding them accountable. And yet they’re getting a lot more sympathy than any of us BIPOC borrowers they preyed on.