Biden administration announces $3.9 billion in debt cancelation for former ITT Tech students
PBS NewsHourDec 26, 2022
Student Loans: Biden To Deliver ‘Fresh Start’ To 7.5M Borrowers
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Image copyright: AP [via Washington Post]
The Facts
According to documents obtained by the Washington Post, the Biden Administration has created a plan to take 7.5M Americans in default on their federal student loans back into good standing, restore their eligibility for financial aid and remove the incident from their credit history.
Student loan default happens when a borrower misses at least 270 days of student loan payments.
The Spin
Democratic narrative
As the pause on student loan payments is nearing its end, the many students who would otherwise be at risk of falling behind on their payments now have the "Fresh Initiative" to fall back on and emerge with a clean slate. This program will help borrowers dramatically.
Republican narrative
While the "Fresh Start" initiative's professed purpose is to help those who are deep in student debt, it actually risks adding to the problem as it would allow borrowers the opportunity to take on more loans, leaving them much worse off than they already are. This is a dangerous decision that will ultimately see taxpayers foot the bill.
