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Unions demand Biden cancel student debt for public service workers

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Labor unions are making a new push to get the Education Department to use executive action to forgive the student loans of Americans working in public service jobs — the latest pressure from the left for the Biden administration to act more aggressively on student debt relief.

A wide range of unions representing teachers, fire fighters, health care workers and government employees on Thursday called on Education Secretary Miguel Cardona to fully erase the debt of borrowers who have worked for more than a decade in public service jobs.

The unions say the relief is needed because the Education Department’s existing Public Service Loan Forgiveness program has been plagued by problems and mismanagement. More than 98 percent of applicants seeking loan forgiveness have been rejected by the program.

“The COVID-19 pandemic underscores the need for immediate action,” the unions wrote to Cardona in a letter, which was shared with POLITICO. “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 was led by the National Education Association, the nation’s largest teachers union, and signed by 14 other unions collectively representing more than 10 million public service workers. They include the American Federation of Government Employees; American Federation of State, County, and Municipal Employees; International Association of Fire Fighters; United Auto Workers; and Service Employees International Union.

Democrats for years have raised concerns about the difficulty that public service workers have had navigating the federal government’s Public Service Loan Forgiveness program. They sharply criticized Education Secretary Betsy DeVos’ oversight of the program, which the Trump administration had proposed eliminating.

“After four years of scandal and allegations of widespread mismanagement, it is clear to our organizations that the federal government has fundamentally failed to deliver on this promise,” the unions wrote in the letter to Cardona on Thursday.

On the campaign trail, President Joe Biden vowed to fix the Public Service Loan Forgiveness program, and he backed legislation that would expand the benefits.

Now the unions are pressing the Biden administration to go further and use executive action to swiftly provide automatic relief to public service workers. The letter says that the Education Department should use its emergency powers during the pandemic to waive any necessary regulations or laws to carry out the loan forgiveness.

But Biden has been skeptical of the notion of using executive powers to unilaterally write off federal student loan debt. Earlier this year, Biden said he would not take executive action to wipe out $50,000 of debt per borrower, as many progressives and Senate Majority Leader Chuck Schumer are urging him to do.

The White House has said that the president has not ruled out taking some type of executive action to cancel student loan debt, and his advisers are reviewing the issue.

The Biden administration over the past week has announced a series of “targeted” relief to federal student loan borrowers, though consumer advocates have criticized the policies as far too narrow.

The Education Department canceled the debts of some students who were defrauded by their for-profit college and waived some of the paperwork requirements to ease loan forgiveness for borrowers with severe disabilities. In addition, the department earlier this week halted collections on more than 1 million borrowers who had defaulted on federally-guaranteed student loans held by private entities.

This blog originally appeared at Politico on April 1, 2021. Reprinted with permission.

About the Author: Michael Stratford is an education reporter for POLITICO Pro. He most recently covered federal higher education policy and student loans at Inside Higher Ed, with previous bylines at The Associated Press, The Chronicle of Higher Education, and Kiplinger’s Personal Finance magazine. 


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18 states are suing Betsy DeVos for putting for-profit college fraudsters over student borrowers

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Betsy DeVos is making it harder for students to get loan forgiveness after being cheated by for-profit colleges, but Democratic attorneys general across the country are challenging her in court. DeVos has had the Education Department put a hold on new rules that were supposed to take effect on July 1 protecting student borrowers—protecting student borrowers is definitely not what Betsy DeVos is about, let’s be clear on that—and 18 states are going to court to get the rules put back in place.

An existing federal law allows borrowers to apply for loan forgiveness if they attended a school that misled them or broke state consumer protection laws. Once rarely used, the system was overwhelmed by applicants after the wave of for-profit failures. Corinthian’s collapse alone led to more than 15,000 loan discharges, with a balance of $247 million.

Taxpayers get stuck with those losses. The rules that Ms. DeVos froze would have shifted some of that risk back to the industry by requiring schools at risk of closing to put up financial collateral. They would also ban mandatory arbitration agreements, which have prevented many aggrieved students from suing schools that they believe have defrauded them.

DeVos really is stepping in in favor of fraudulent schools over defrauded students—and taxpayers—in other words.

“Since day one, Secretary DeVos has sided with for-profit school executives against students and families drowning in unaffordable student loans,” said Maura Healey, the Massachusetts attorney general, who led the multistate coalition. “Her decision to cancel vital protections for students and taxpayers is a betrayal of her office’s responsibility and a violation of federal law.”

Two students left with debts after their school lied to them about their job prospects are also suing the Education Department over the same issues.

This blog was published at DailyKos on July 6, 2017.  Reprinted with permission. 

About the Author: Laura Clawson is labor editor at DailyKos.


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Young Workers Struggle to Find Jobs, Pay Student Debt

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Credit: Joe Kekeris
Credit: Joe Kekeris

“For Most Graduates, a Grueling Job Hunt Awaits,” The Wall Street Journalwrites today. Over the weekend, The New York Times sounded the alarmabout employers’ growing use of unpaid internships in fields that typically have never exploited free labor.

So, how bad is it for young workers? According to the Economic Policy Institute (EPI), over the past year

“the unemployment rate for young high school graduates averaged 31.5 percent and the underemployment rate averaged 54.7 percent. For college graduates, the unemployment rate averaged 9.4 percent over the last year, while the underemployment rate averaged 19.1 percent. Unemployment rates for young African American and Hispanic high school and college graduates were higher than overall rates.”

Between 2000 and 2011, the real wages of young high school graduates declined by 11.1 percent, and the real wages of young college graduates declined by 5.4 percent. Entering the labor market during a downturn can have long-term scarring effects on young workers, in the form of reduced earnings, greater earnings instability and more spells of non-employment over the next 10 to 15 years, according to a recent EPI briefing paper, “The Class of 2012: Labor Market for Young Graduates Remains Grim.”

Compounding their economic grief, young workers face huge student debt loads, a burden that only will increase if Congress doesn’t act ASAP.

(If you’re in Washington, D.C., join young workers on Capitol Hill to meet with key offiicals and tell them what young people are saying about student loans, unemployment, access to higher ed and affordable health care. Click here to hop on a bus to the Hill and to find out more.)

Economist Heidi Shierholz, one of the report’s authors, says the solution to the crisis for young workers is the same as that for all the more than 14 million jobless Americans:

“The policies that will most effectively help young workers right now are ones that generate strong job growth overall, like fiscal relief to states, substantial additional investment in infrastructure and direct job creation programs in communities particularly affected by unemployment.”

This blog originally appeared in AFL-CIO on May 7, 2012. Reprinted with permission.

About the author: Tula Connell got her first union card while she worked her way through college as a banquet bartender for the Pfister Hotel in Milwaukee they were represented by a hotel and restaurant local union (the names of the national unions were different then than they are now). With a background in journalism (covering bull roping in Texas and school boards in Virginia) she started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), she now blogs under the title of AFL-CIO managing editor.


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