Attorney General Kwame Raoul today joined a multistate coalition of eight attorneys general urging President Biden to fully cancel federal student loan debt owed by every federal student loan borrower in the country. The coalition urges the president to immediately exercise his authority under the Higher Education Act to cancel the more than $1.7 trillion owed to the federal government by student borrowers.
“Without action, the student loan crisis will continue to get worse, stifling economic activity and weighing down families with mountains of debt that they cannot afford to repay,” Raoul said. “While long-term reforms to the student loan system are desperately needed, I urge the Biden administration to take action that will provide immediate relief to student loan borrowers.”
In their letter, Raoul and the coalition argue that a full cancelation of student debt is necessary to address the sheer enormity of debts owed, systemically flawed repayment and forgiveness systems and the disproportionate impact of the debt burden on millions of borrowers. While Raoul and other state attorneys general have taken key actions to ease debt burdens wherever possible, the coalition contends that only permanent action by the Biden administration can provide the widespread relief that is needed by millions of federal student loan borrowers.
The coalition further argues that the cancelation of federal student loan debts will reduce stress and mental fatigue and provide countless opportunities for borrowers, such as saving for retirement and purchasing new homes. Additionally, the attorneys general argue that canceling federal student loan debt can substantially help close the racial wealth gap.
Today’s comment letter builds off recent action taken by the Illinois Attorney General’s office to protect student loan borrowers. In 2021, Raoul’s Know Before You Owe legislation was enacted to address the lack of publicly-available data about private student loans in several ways, ensuring student borrowers have information about their federal aid eligibility before they turn to more costly private loans.
The Illinois Attorney General’s office has long been a national leader in investigating and enforcing consumer protection violations in the higher education field. Raoul’s office has secured more than $160 million in relief for Illinois consumers defrauded by their schools, lenders, or servicers since 2019. Earlier this year, Raoul’s office announced a $1.85 billion national settlement with Navient that includes nearly $5 million in restitution payments and more than $133 million in debt cancelation for Illinois borrowers. In addition, Illinois will receive a direct payment under that settlement of more than $7 million.
Student borrowers who have questions or are in need of assistance can call the Attorney General’s Student Loan Helpline at (800) 455-2456. Borrowers can also file complaints on the Attorney General’s website.
Joining Raoul in sending today’s comment letter are the attorneys general of Hawaii, Michigan, Minnesota, New Mexico, New York, Puerto Rico and Washington.
- Downstate - Wednesday, May 4, 22 @ 3:30 pm:
My friend bought a house that ended up being worth a lot less than what they paid for it. He learned a lot from the school of hard knocks. Can we pay off that “education” as well?
- Peanut Gallery - Wednesday, May 4, 22 @ 3:33 pm:
I know people get a little heated about this subject, but man it would really help a lot of people.
- Anonymous - Wednesday, May 4, 22 @ 3:37 pm:
Why don’t Kwame pay them all off damn fool
- Old Lobster - Wednesday, May 4, 22 @ 3:39 pm:
That’s disappointing. Beginning in 1983 I paid $140.46 a month for 10 years to pay off my student loans…and I was only making $20,000 a year.
- Grade3step1 - Wednesday, May 4, 22 @ 3:45 pm:
I FINALLY retired my student loan debt in 2019 after 10 years. Some months I actually had to forego other purchases to make my loan payments on time. I guess I get NOTHING for sacrificing to do the right thing -_-
- Mrs. Silence Dogood - Wednesday, May 4, 22 @ 3:46 pm:
The real winners are the parents that did not have the money to cover the cost of sending their kids to college. I’m talking about the parents that drive nice new cars, go on vacations, and live in a nice house. We on the other hand have old cars, live in a modest home and don’t go on vacations. We saved our money to pay for our children’s college education so they would not start their adult lives in debt. Aren’t I the fool.
- City Zen - Wednesday, May 4, 22 @ 3:48 pm:
==long-term reforms to the student loan system are desperately needed==
AG’s should act like AG’s and go after the source: the product being sold.
I’m for offering 100% refunds on fraudulent products. Prove you were a victim of deceptive advertising by the supplier and return your diploma for a full refund.
If the product is not fraudulent and we’re forgiving student debt because the student got a bad deal, the program that they went to should be banned from student loans and come with a disclaimer prior to purchase (like a pack of cigarettes).
Best solution is to have the institution be the co-signer of all student loans.
- 47th Ward - Wednesday, May 4, 22 @ 3:49 pm:
A better solution is to revisit the federal bankruptcy law. Prior to 2004, student loan debt was dischargeable via bankruptcy filings. It never should have been excluded in the first place. If someone legitimately cannot pay off debts, that’s what BK laws are designed to resolve.
Rather than a blanket approach which may have the unintended consequence of making lenders decline to give unsecured loans to students (a disaster), we can let the courts settle these hard situations on a case by case basis, with all of the protections BK offers to both lenders and borrowers.
- SomeGuy - Wednesday, May 4, 22 @ 3:50 pm:
I got on board for Public Service Student Loan Forgiveness (PSLF). It’s what has kept me from looking for employment outside of public service any time a career change was in order.
The gist of it is: Pay your loans on an income based plan while working in public service. After 10 years whatever remains of your loans are wiped out.
If I remember right the formula is that 10% of any income above 150% of the poverty level is paid towards your loans.
All the people who would like their loans forgiven should apply for jobs with the city, county, state, federal government or most 501c3 organizations. Assuming you are not making big bucks, your loans will be gone in 10 years.
I’ve got about 2 more years to go.
- Peanut Gallery - Wednesday, May 4, 22 @ 3:52 pm:
I already commented above… but needed to add to my comment. This goes for many, many issues…but the argument that “I suffered through it, so should you” is tired and doesn’t advance society. I don’t know if this is the right answer, but either way… the student loan process and interest rates cannot continue to go as they have. I really do hope future students and borrowers have a better time of it than I did.
- Avocado Toast - Wednesday, May 4, 22 @ 4:07 pm:
You can really tell the age of the commenting group by their responses. ha. *Insert “back in my day” comments here.
- lone liberal - Wednesday, May 4, 22 @ 4:13 pm:
Same people arguing against this have had no problems with bailing out corporations….sad
- SuburbanRepublican - Wednesday, May 4, 22 @ 4:15 pm:
I graduated in 2011 with roughly $50,000 in debt between federal and private. My income post-college was very modest. I was able to pay off my debt in half the time by living within my means and applying extra cash (every tax refund went towards my loans). It certainly wasn’t easy and I could have done so many other things with that money. But it was a huge relief paying them off ahead of schedule despite not earning a big salary.
I look forward to applying for a refund of my payments.
- Scooter - Wednesday, May 4, 22 @ 4:17 pm:
“All the people who would like their loans forgiven should apply for jobs with the city, county, state, federal government or most 501c3 organizations. Assuming you are not making big bucks, your loans will be gone in 10 years.”
And then those people promptly bail from public service, because salaries are not competitive.
Many public school districts are in the process of learning this; if any kind of mass loan forgiveness is pushed through, the State - as an employer - is going to learn the hard way that pay grades (based on Springfield’s cost of living but applied statewide) should be region-specific; the exodus of current employees from State jobs is going to hurt pretty bad, especially in the Chicago area.
- chicago lib - Wednesday, May 4, 22 @ 4:19 pm:
How about just canceling all the interest? So everyone still pays back the principal borrowed. Seems like it wouldn’t alienate so many folks.
- Rich Miller - Wednesday, May 4, 22 @ 4:19 pm:
===Beginning in 1983 I paid $140.46 a month for 10 years to pay off my student loans…and I was only making $20,000 a year. ===
Households that earn $35,000 or less a year owe on average $34,015 in student loan debt.
Households that earn $35,000 or less a year hold roughly 20% of the total public student loan debt.
https://educationdata.org/student-loan-debt-by-income-level
Also, $20,000 a year in 1983 is worth about $57,731.73 today. And if you were making $20K a year after ten years of work, that’s on you.
Cry me a river.
- Rich Miller - Wednesday, May 4, 22 @ 4:21 pm:
===your loans will be gone in 10 years===
And until then you’re paying wicked interest payments every month.
- Amalia - Wednesday, May 4, 22 @ 4:26 pm:
find a way to get some contributions from those who are making dough and those who took out loans even when parents were flush.
- SomeGuy - Wednesday, May 4, 22 @ 4:28 pm:
===And until then you’re paying wicked interest payments every month.===
Depends on your income. Based on my income and my family size my payment is about 1/5 of what it would be under traditional repayment. It is less than the interest gained on the loan. So yes, my overall balance is increasing. This would normally be a terrible strategy, but as long as the government sticks to their word I don’t need to worry about how much additional interest accrues. I make 10 years of payments based on the Income Based Repayment plan, whatever is left is gone. I have to annually re-certify my income, so my payments have slowly crept up along with my salary.
The only downside is that the forgiveness will be taxed as income. I will need to budget for additional income taxes charged in 2024.
- Three Dimensional Checkers - Wednesday, May 4, 22 @ 4:29 pm:
It’s a nice letter, and I agree with the policy position, but it’s just a letter. I’m pretty sure the AG Madigan initiated the lawsuit mentioned in the press release that AG Raoul and the other state AGs then settled.
- Franklin - Wednesday, May 4, 22 @ 4:30 pm:
A little financial literacy education would go a long way.
- Huh? - Wednesday, May 4, 22 @ 4:37 pm:
The question to be answered is which student loans will be forgiven. Will PLUS loans be included? Because of where my daughters went to college, we had to take out PLUS loans to cover all of their expenses.
- Lawman - Wednesday, May 4, 22 @ 4:40 pm:
So people who did not go to college will have to pay more in taxes so that those who went to college and took out loans don’t have to pay the debts they incurred. How is this reasonable?
- City Zen - Wednesday, May 4, 22 @ 4:50 pm:
==How about just canceling all the interest?==
This always seemed to be the most pragmatic approach. Offer a 10 year interest-free window which would incentivize borrowers to pay the debt earlier.
- SAP - Wednesday, May 4, 22 @ 5:00 pm:
Seems like forgiving 50% after the first $5,000 up to $25,000, or $50,000, or $75,000–you pick the number–would target relief to those who need it most.
- TheInvisibleMan - Wednesday, May 4, 22 @ 6:03 pm:
“I suffered through it, so should you”
Not surprising. The epitome of conservatism is that things need to stay the same over time.
I don’t have any student loan debt, so this doesn’t benefit me. It *also* doesn’t harm me or anyone else, therefore I see no problem with it.
For those who have a *feeling* that it is unfair, well that’s just a feeling. Not a policy position.
- downstate retiree - Wednesday, May 4, 22 @ 6:18 pm:
Absolutely an insane policy.
- Jibba - Wednesday, May 4, 22 @ 7:21 pm:
Cancellation of loans for certain income brackets is sensible. Ending interest is even better. Increasing college funding and student aid so loans become less necessary is best.
- Eyeball - Wednesday, May 4, 22 @ 7:29 pm:
High income parent that can pay for kid’s college might not do so now in anticipation of some student loan forgiveness and just let the low income kid take out a student loan. If the student loan is not forgiven, then pay it off later.
- Sir Reel - Wednesday, May 4, 22 @ 7:30 pm:
What will forgiving student loans do about the cost of higher education? Seems like it would allow colleges and universities to raise their prices even more since student debt will be forgiven.
- Candy Dogood - Wednesday, May 4, 22 @ 7:31 pm:
===We saved our money to pay for our children’s college education so they would not start their adult lives in debt. Aren’t I the fool. ===
It’s not every day I have an opportunity to disagree with a cousin, is it Thanksgiving already?
I’m going to pick on SIUC because of the opinion people have of SIUC if they formed it during the 1980s or before. SIU’s website suggests that a student should budget $29,906.00 for the 2021-22 academic year. I think it’s safe to round that to $120,000 being what they would expect, at a minimum, a student to spend in order to spend 4 years as a full time student on their campus. University of Illinois Urbana-Champaign thinks a student should expect to budget something like $15,000 to $40,000 more if we extrapolate this academic year’s budget for the next 4 years.
If you were able to support your children so that they graduated college without debt, that’s great. If you saved in order to let them graduate without debt at the cost of a more lavish lifestyle, that’s great too. You did a great thing for your kids and it’s something you can be proud of doing.
Being against a policy because you think you’re better than your neighbors or your neighbors are undeserving is certainly not a an new phenomenon but it is still not a good reason to be against a policy position. Perhaps you’ve not seen the screen shots of the tweet about people being against a cure for cancer because they’ve “beat” cancer, but that’s what people like you, dear cousin, sound like.
This student loan debt we’re discussing exists a number on a ledger that belongs to the federal government. The interest and payments are all made to the federal government. There are better ways for the federal government to raise revenue than saddling millennial and generation Z students with massive amounts of debt that cause them to make economic choices differently than they otherwise would every. single. day.
My dearest cousin, I want to remind you that the cost of attendance that is being paid by the students now is significantly more than it used to be, and I don’t mean dollars, I mean as a portion of the overall cost of their education. These kids turned to adults are seeking the knowledge and skills that our society requires to function. They are providing a public good for us, and not everyone finishes. Millions of federal student loan borrowers never finished and probably never will finish their degree.
There’s a lot of things the Government does that I don’t personally need. There’s a lot of programs out there that provide help and assistance I don’t need, but the point of what we’re doing here in our civil society isn’t intended to be completely and absolutely self serving.
Building a better society, building a better future, creating a more just society doesn’t mean only doing it for you and some times it means you need to carry someone else’s kit.
- Candy Dogood - Wednesday, May 4, 22 @ 7:34 pm:
===- SomeGuy - Wednesday, May 4, 22 @ 4:28 pm:===
I hope you check back, because I have some good news for you. Your PSLF won’t be considered taxable income.
“Are loan amounts forgiven under PSLF considered taxable by the IRS?
No. According to the Internal Revenue Service (IRS), student loan amounts forgiven under PSLF aren’t considered income for tax purposes. For more information, check with the IRS or a tax advisor.”
https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service/questions
- Biker - Wednesday, May 4, 22 @ 8:55 pm:
Who is gunna take a chance on an entrepreneurial venture or invest in the stock market or buy a house, a guy or gal stuck paying $1,000 a month or a guy or gal that suddenly has the ability to do something else with that $1,000 a month? This is clearly a plan that unlocks capital. The government has been earning 8% interest when rates dropped to nothing all with the promise of public service loan forgiveness. It’s not smart to screw with public service. The work doesn’t come with bonuses or shares.
- Original Rambler - Wednesday, May 4, 22 @ 9:27 pm:
There needs to be a provision for trade school debt. Or kiss blue collar support for Dems goodbye.
- Roads Scholar - Wednesday, May 4, 22 @ 9:38 pm:
“Back in my day . . . “ Alright, let’s say anyone with education debt can swap their current wage with an inflation-adjusted wage from “your day.” Then we can see who’s getting the subsidy. Spoken as someone who paid off their student debt.
- Yooper in Diaspora - Wednesday, May 4, 22 @ 10:03 pm:
I just paid my loans off–after 18 years, taking out my savings to shave off a few more years. I get the SuburbanRepublican who’d like to apply for a refund. It’s frustrating to think I could have saved $10,000-$15,000 if I’d waited a little longer (in part because of the new changes in public service loan forgiveness). But I just see too much crushing debt, especially through those interest rates, limiting the lives of too many people; the common good calls for at least partial cancellation of student loan debt.
Adequately funding higher education at the state level will benefit those who do and do not need to take out loans (at least those at public institutions).
- Jibba - Wednesday, May 4, 22 @ 10:10 pm:
These solutions should be just as forward looking as backward. While you may be helping out people who are in debt already, another generation of new debtors is born that will need to be bailed out in the future. Fixing the problem is as important or more than bailing folks out.
- Mister Ed - Thursday, May 5, 22 @ 5:09 am:
While canceling student debt would help many, maybe regulate what interest banks and other institutions can charge for education. My wish is they could cancel all medical debt and reduce property taxes.
- Galway Bay - Thursday, May 5, 22 @ 5:54 am:
My son got a tuition rebate of 2500 for COVID semester of fall 2020. All classes on line. This is at a very good out of state university. So that tells me that the Rec center, the library, class rooms, labs, campus maintenance etc…. Only costs 2500 per student? Something never added up about that.
- Mason born - Thursday, May 5, 22 @ 7:11 am:
This is spending tax money. The whole in the ledger will need to be filled by tax dollars. So the b;he collar guy working at Cat who didn’t go to college can now pay in taxes to forgive the loans of his new boss who did go to college.
- JS Mill - Thursday, May 5, 22 @ 8:48 am:
Bravo Candy Dogood. So well said.
=So people who did not go to college… How is this reasonable?=
=So the b;he collar guy working at Cat who didn’t go to college can now pay in taxes=
First, this is not just about “college”. Trade and tech schools that provide certifications and not degrees are also eligible for federal student loans. You ever check them out? They more expensive than most typical universities. And the people going there are not in the upper economic strata.
The argument about paying taxes for other people is simply uniformed.
And how much of my tax money goes to things that I don’t want or need?
If you are against this program then you should be against Ag subsidies and any tax breaks, incentives, or subsidies for anyone.
You would be amazed how hard that would hit home.