Trump’s Education Boss Reveals Greedy Truth Behind Biden’s Student Loan Forgiveness: ‘They Have Profited Massively’
President Trump’s Education Secretary, Linda McMahon, has spoken out in strong support of the administration’s move to resume collecting student loan debt, accusing colleges of taking advantage of loan forgiveness initiatives enacted under Biden.
On Monday, the Department of Education revealed that starting May 5, it would resume collection efforts on student loan debt from the approximately 5.3 million individuals currently in default.
In a sharply worded opinion piece published in the Wall Street Journal, McMahon pinned the blame for the student debt crisis on Biden’s policies and institutions of higher learning, saying they’ve misled students while benefitting from the system.
“Colleges and universities call themselves nonprofits, but for years they have profited massively off the federal subsidy of loans, hiking tuition and piling up multibillion-dollar endowments while students graduate six figures in the red,” McMahon wrote.
She pointed to research from nearly a decade ago that links the rise in tuition to increases in federal loan limits.
“A widely cited 2015 study found that for every dollar of increased federal caps on subsidized loans, colleges raised tuition by 60 cents,” she continued.
McMahon also blasted academic institutions for continuing to push students toward degrees that hold little real-world value, while encouraging them to take on huge financial burdens.
“Many of the degree-granting programs that qualify for student loans are worthless on the job market, but colleges continue to accept students to these programs and encourage them to borrow to pay for them.”
She emphasized that both students and institutions must be held responsible for the role they play in the growing student debt crisis.
“Accountability is a two-way street. As we push to hold student borrowers to account, we will also push colleges to be responsible and transparent.”
Dismissing claims that the resumption of collections is punitive, McMahon said the decision is rooted in fiscal responsibility and called out President Biden for making hollow campaign pledges.
She said Biden used student loan forgiveness to appeal to younger voters during his campaign, without the legal authority to deliver on those promises.
Student loan payments were first suspended during Trump’s administration in response to the COVID-19 pandemic, McMahon noted, but the Biden White House extended those suspensions beyond what she says was legally permissible.
According to her, this extension only made things worse by giving borrowers the false impression they wouldn’t need to repay what they owed.
“I am announcing the end of this dishonest and irresponsible policy. We will conform the department’s repayment options to federal court decisions and end the Biden-era practice of zero-interest, zero-accountability forbearances that are pushing borrowers into loan delinquency and default,” she said.
She outlined the steps that will soon take effect, including getting nearly 2 million borrowers back into active repayment status and restarting collection efforts for those who are still in default.
“On May 5, we will begin the process of moving roughly 1.8 million borrowers into repayment plans and restart collections of loans in default. Borrowers who don’t make payments on time will see their credit scores go down, and in some cases, their wages automatically garnished.
“Why? Not because we want to be unkind to student borrowers. Borrowing money and failing to pay it back isn’t a victimless offense. Debt doesn’t go away; it gets transferred to others. If borrowers don’t pay their debts to the government, taxpayers do,” McMahon added.
She also underscored the unique nature of student debt, saying it must be taken seriously and cannot be viewed like ordinary consumer loans.
“We are committed to ensuring that borrowers are paying back their loans, that they are fully supported in doing so, and that colleges can’t create such a massive liability for students and their families, jeopardizing their ability to achieve the American dream,” McMahon said.
Earlier, McMahon had taken aim at Biden’s repeated attempts to erase large amounts of student debt—moves that were partially thwarted in court decisions last year.
According to the Department of Education, 42.7 million Americans currently owe over $1.6 trillion in student loans, creating what the agency described as a looming threat to the financial health of the federal student loan system.
The department further warned that millions of borrowers have gone well over a year without making payments, with some having defaulted on their loans for more than seven years.
{Matzav.com}