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Attorney General Ellison calls for cancellation of federal student-loan debt

Joins multistate coalition in support of congressional resolutions calling for the cancellation of up to $50K in debt per student borrower

 

February 22, 2021



775K Minnesotans carrying average $37.5K in student-loan debt; Minnesota graduates’ average debt load 11th-highest in country

February 19, 2021 (SAINT PAUL) — Minnesota Attorney General Keith Ellison today joined a multistate coalition urging the adoption of U.S. House and Senate resolutions that call for the cancellation of up to $50,000 in federal student debt owed by each and every federal student loan borrower nationwide.

In their letter to Congress, Attorney General Ellison and the coalition of 17 attorneys general stress the immediate relief needed for borrowers who are struggling with unmanageable student loan debt, which has only been exacerbated by the COVID-19 pandemic and current financial crisis. The resolutions, Senate Resolution 46 and House Resolution 100, call on President Biden to exercise his authority to cancel up to $50,000 in federal student-loan debt per borrower.

According to the nonprofit Student Borrower Protection Center, there are 775,300 student-loan borrowers in Minnesota with a collective $29.1 billion in student-loan debt, for an average student-loan debt load of about $37,500 per borrower. According to The Institute for College Access and Success, 2019 graduates in Minnesota had the 11th-highest average student-loan debt in the country. Minnesota ranked 5th in the nation in percentage of 2019 graduates with student-loan debt, at 66 percent.

“The economy is stacked against regular people. That makes it hard for way too many folks to afford their lives,” Attorney General Ellison said. “People seek higher education to build a better future for themselves and their families, but the sky-high cost means too many of them have to take out levels of student debt that make it impossible to build that better future — and Minnesotans are hit harder by high student debt than people in most states. I’m proud to join this national coalition fighting for relief because no Minnesotan and no American should be shackled by outrageous debt in an effort to afford their lives.”

According to the letter, the existing repayment system for federal student loans provides insufficient opportunity for struggling borrowers to manage their debts. As many as one in five federal student loan borrowers are in default. Options for student borrowers to obtain relief have also proven to be inadequate. Only 2 percent of borrowers who applied for loan discharges under the Public Service Loan Forgiveness program have been granted a discharge, and efforts by state attorneys general to obtain student loan discharges for students defrauded by for-profit schools have been stymied by the U.S. Department of Education.

The letter specifically highlights misconduct by for-profit schools, and how the industry’s predatory practices have disproportionately harmed people of color. The attorneys general state that cancelling federal student loan debt can substantially increase Black and Latino/a household wealth and help close the racial wealth gap.

AG’s fights for student-loan borrowers

Today’s letter to Congress is the latest action by Attorney General Ellison to advocate for Minnesota students and relieve borrowers from the worst effects of today’s student debt crisis. In recent years, the Attorney General’s Office has handled and mediated countless complaints from Minnesotans affected by fraudulent and abusive practices by servicers, for-profit colleges, and other bad actors in the student debt industry. In response to these complaints, Attorney General Ellison has secured refunds for borrowers harmed by student-debt settlement companies that misrepresented and illegally collected fees from debt-ridden students (January 14, 2021; October 9, 2020; June 6, 2019). He obtained millions in debt relief and refunds for students from illegal loans issued through for-profit schools like ITT and the Minnesota School of Business/Globe University. He led the fight for expanded debt relief for students left with worthless loans taken out to attend failed for-profit school Argosy University, and continues to fight to secure relief for students defrauded by Globe University and the Minnesota School of Business.

In addition, Attorney General Ellison also fought against and sued to stop former Education Secretary Betsy DeVos from implementing federal rules designed to thwart debt relief for defrauded students and remove accountability for for-profit schools.

The Attorney General’s Office also publishes a Student Loan Handbook to provide guidance and information to students facing hardships with student debt or considering taking out student loans.

Joining Attorney General Ellison in today’s letter, which was co-led by Massachusetts Attorney General Maura Healey and New York Attorney General Letitia James, are the attorneys general of Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, New Jersey, New Mexico, Oregon, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia. A copy of the letter is available on the website of Massachusetts Attorney General Maura Healey.

 

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