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Monday, January 20, 2025
Major updates: student debt relief progress and new fact sheets (SBPC)
Sunday, January 19, 2025
The Business Plots, Then and Now
In 1933, a group of American businessman planned a coup to take down the new President, Franklin Roosevelt. In this scheme, General Smedley Butler would be tasked with orchestrating the overthrow. This attempted coup was called the Business Plot.
College students today may ask, so what's so important about this moment in history? The point is that we have entered an era again where big business has a dominating influence over American politics. In the case of the 1933 moment, the coup was reactive. American business had failed, a Great Depression was in progress, and businessmen were fighting to maintain control, a control that they were used to having under Harding, Coolidge, and Hoover. The man tasked to lead the plot, General Butler, squashed it before it happened. And the story largely faded away.
Eight years later, in 1941, the US would be fighting a world war against global fascism and imperialism. In the aftermath of the war, a stronger nation would arise. Today, we are also a nation facing intense competition and conflict, this time against China, Russia, India and other nations, with global climate change being a factor that wasn't apparent back then.
In 2024, US business people, some of the richest people in the world,
did something similar, but more proactive and less controversial. Today, folks, in general are OK with American businessmen pulling the strings. The most wealthy man have succeeded where big banks and big business failed before. And they have elected a friend. Today, cryptocurrency is booming. The stock market is booming for now. Unemployment is at record lows--for now. Big business has managed to gain greater control of the US government with little or no uproar.
Higher Ed Unbridled (And Muzzled)
In early 2025, we will slowly begin to see what US higher education looks like with less oversight and accountability, something that many business leaders and administrators secretly hope for. At the same time, we can imagine higher education and its media wary of talking out of turn.
In the past, the Higher Education Inquirer (HEI) focused on exposing bad actors in a few areas of the higher education business: online program managers, large robocolleges, student loan servicers, lead generators, SLAB makers, and university endowments.
We followed the plight of student loan debtors and their families, working-class adjuncts, and striking academic labor. Together, they represented tens of millions of Americans. And we covered funding cuts, layoffs, and universities in financial peril.
We promoted people, in higher education and the higher education business, who fight for more transparency and accountability--those who provided value to consumers.
And HEI highlighted the work of important scholars who discussed the role of higher education in larger matters of politics and economics, climate change and global conflicts.
Despite all of this work, we believe there will be a need to expand our focus over the next four years. We expect fraud and corruption to widen across the higher ed sector and for media coverage of this malfeasance to be minimal--maybe even less than the past.
While higher ed may be unbridled, the higher ed media may be muzzled. We hope to do the opposite despite the costs.
Please support the Higher Education Inquirer by consistently reading and sharing our work with allies, and by letting us know what you all see. Your comments are always welcome and your participation does matter. Let's work and struggle together--in solidarity.
Saturday, January 18, 2025
The US is leading us closer to nuclear war (Jeffrey Sachs)
Columbia University Professor Jeffrey Sachs says that the United States is steering the world toward disaster. Sachs served as the Director of the Earth Institute at Columbia University from 2002 to 2016 and is considered one of the world’s leading experts on economic development, global macroeconomics, and the fight against poverty.
Friday, January 17, 2025
Social Security Offsets and Defaulted Student Loans (CFPB)
Executive Summary
When borrowers default on their federal student loans, the U.S. Department of Education (“Department of Education”) can collect the outstanding balance through forced collections, including the offset of tax refunds and Social Security benefits and the garnishment of wages. At the beginning of the COVID-19 pandemic, the Department of Education paused collections on defaulted federal student loans.1 This year, collections are set to resume and almost 6 million student loan borrowers with loans in default will again be subject to the Department of Education’s forced collection of their tax refunds, wages, and Social Security benefits.2 Among the borrowers who are likely to experience forced collections are an estimated 452,000 borrowers ages 62 and older with defaulted loans who are likely receiving Social Security benefits.3
This spotlight describes the circumstances and experiences of student loan borrowers affected by the forced collection of Social Security benefits.4 It also describes how forced collections can push older borrowers into poverty, undermining the purpose of the Social Security program.5
Key findings
- The number of Social Security beneficiaries experiencing forced collection grew by more than 3,000 percent in fewer than 20 years; the count is likely to grow as the age of student loan borrowers trends older. Between 2001 and 2019, the number of Social Security beneficiaries experiencing reduced benefits due to forced collection increased from approximately 6,200 to 192,300. This exponential growth is likely driven by older borrowers who make up an increasingly large share of the federal student loan portfolio. The number of student loan borrowers ages 62 and older increased by 59 percent from 1.7 million in 2017 to 2.7 million in 2023, compared to a 1 percent decline among borrowers under the age of 62.
- The total amount of Social Security benefits the Department of Education collected between 2001 and 2019 through the offset program increased from $16.2 million to $429.7 million. Despite the exponential increase in collections from Social Security, the majority of money the Department of Education has collected has been applied to interest and fees and has not affected borrowers’ principal amount owed. Furthermore, between 2016 and 2019, the Department of the Treasury’s fees alone accounted for nearly 10 percent of the average borrower’s lost Social Security benefits.
- More than one in three Social Security recipients with student loans are reliant on Social Security payments, meaning forced collections could significantly imperil their financial well-being. Approximately 37 percent of the 1.3 million Social Security beneficiaries with student loans rely on modest payments, an average monthly benefit of $1,523, for 90 percent of their income. This population is particularly vulnerable to reduction in their benefits especially if benefits are offset year-round. In 2019, the average annual amount collected from individual beneficiaries was $2,232 ($186 per month).
- The physical well-being of half of Social Security beneficiaries with student loans in default may be at risk. Half of Social Security beneficiaries with student loans in default and collections skipped a doctor’s visit or did not obtain prescription medication due to cost.
- Existing minimum income protections fail to protect student loan borrowers with Social Security against financial hardship. Currently, only $750 per month of Social Security income—an amount that is $400 below the monthly poverty threshold for an individual and has not been adjusted for inflation since 1996—is protected from forced collections by statute. Even if the minimum protected income was adjusted for inflation, beneficiaries would likely still experience hardship, such as food insecurity and problems paying utility bills. A higher threshold could protect borrowers against hardship more effectively. The CFPB found that for 87 percent of student loan borrowers who receive Social Security, their benefit amount is below 225 percent of the federal poverty level (FPL), an income level at which people are as likely to experience material hardship as those with incomes below the federal poverty level.
- Large shares of Social Security beneficiaries affected by forced collections may be eligible for relief or outright loan cancellation, yet they are unable to access these benefits, possibly due to insufficient automation or borrowers’ cognitive and physical decline. As many as eight in ten Social Security beneficiaries with loans in default may be eligible to suspend or reduce forced collections due to financial hardship. Moreover, one in five Social Security beneficiaries may be eligible for discharge of their loans due to a disability. Yet these individuals are not accessing such relief because the Department of Education’s data matching process insufficiently identifies those who may be eligible.
Taken together, these findings suggest that the Department of Education’s forced collections of Social Security benefits increasingly interfere with Social Security’s longstanding purpose of protecting its beneficiaries from poverty and financial instability.
Introduction
When borrowers default on their federal student loans, the Department of Education can collect the outstanding balance through forced collections, including the offset of tax refunds and Social Security benefits, and the garnishment of wages. At the beginning of the COVID-19 pandemic, the Department of Education paused collections on defaulted federal student loans. This year, collections are set to resume and almost 6 million student loan borrowers with loans in default will again be subject to the Department of Education’s forced collection of their tax refunds, wages, and Social Security benefits.6
Among the borrowers who are likely to experience the Department of Education’s renewed forced collections are an estimated 452,000 borrowers with defaulted loans who are ages 62 and older and who are likely receiving Social Security benefits.7 Congress created the Social Security program in 1935 to provide a basic level of income that protects insured workers and their families from poverty due to situations including old age, widowhood, or disability.8 The Social Security Administration calls the program “one of the most successful anti-poverty programs in our nation's history.”9 In 2022, Social Security lifted over 29 million Americans from poverty, including retirees, disabled adults, and their spouses and dependents.10 Congress has recognized the importance of securing the value of Social Security benefits and on several occasions has intervened to protect them.11
This spotlight describes the circumstances and experiences of student loan borrowers affected by the forced collection of their Social Security benefits.12 It also describes how the purpose of Social Security is being increasingly undermined by the limited and deficient options the Department of Education has to protect Social Security beneficiaries from poverty and hardship.
The forced collection of Social Security benefits has increased exponentially.
Federal student loans enter default after 270 days of missed payments and transfer to the Department of Education’s default collections program after 360 days. Borrowers with a loan in default face several consequences: (1) their credit is negatively affected; (2) they lose eligibility to receive federal student aid while their loans are in default; (3) they are unable to change repayment plans and request deferment and forbearance;13 and (4) they face forced collections of tax refunds, Social Security benefits, and wages among other payments.14 To conduct its forced collections of federal payments like tax refunds and Social Security benefits, the Department of Education relies on a collection service run by the U.S. Department of the Treasury called the Treasury Offset Program.15
Between 2001 and 2019, the number of student loan borrowers facing forced collection of their Social Security benefits increased from at least 6,200 to 192,300.16 That is a more than 3,000 percent increase in fewer than 20 years. By comparison, the number of borrowers facing forced collections of their tax refunds increased by about 90 percent from 1.17 million to 2.22 million during the same period.17
This exponential growth of Social Security offsets between 2001 and 2019 is likely driven by multiple factors including:
- Older borrowers accounted for an increasingly large share of the federal student loan portfolio due to increasing average age of enrollment and length of time in repayment. Data from the Department of Education (which is only available since 2017), show that the number of student loan borrowers ages 62 and older, increased 24 percent from 1.7 million in 2017 to 2.1 million in 2019, compared to less than 1 percent among borrowers under the age of 62.18
- A larger number of borrowers, especially older borrowers, had loans in default. Data from the Department of Education show that the number of student loan borrowers with a defaulted loan increased by 230 percent from 3.8 million in 2006 to 8.8 million in 2019.19 Compounding these trends is the fact that older borrowers are twice as likely to have a loan in default than younger borrowers.20
Due to these factors, the total amount of Social Security benefits the Department of Education collected between 2001 and 2019 through the offset program increased annually from $16.2 million to $429.7 million (when adjusted for inflation).21 This increase occurred even though the average monthly amount the Department of Education collected from individual beneficiaries was the same for most years, at approximately $180 per month.22
Figure 1: Number of Social Security beneficiaries and total amount collected for student loans (2001-2019)
Source: CFPB analysis of public data from U.S. Treasury’s Fiscal Data portal. Amounts are presented in 2024 dollars.
While the total collected from Social Security benefits has increased exponentially, the majority of money the Department of Education collected has not been applied to borrowers’ principal amount owed. Specifically, nearly three-quarters of the monies the Department of Education collects through offsets is applied to interest and fees, and not towards paying down principal balances.23 Between 2016 and 2019, the U.S. Department of the Treasury charged the Department of Education between $13.12 and $15.00 per Social Security offset, or approximately between $157.44 and $180 for 12 months of Social Security offsets per beneficiary with defaulted federal student loans.24 As a matter of practice, the Department of Education often passes these fees on directly to borrowers.25 Furthermore, these fees accounted for nearly 10 percent of the average monthly borrower’s lost Social Security benefits which was $183 during this time.26 Interest and fees not only reduce beneficiaries’ monthly benefits, but also prolong the period that beneficiaries are likely subject to forced collections.
Forced collections are compromising Social Security beneficiaries’ financial well-being.
Forced collection of Social Security benefits affects the financial well-being of the most vulnerable borrowers and can exacerbate any financial and health challenges they may already be experiencing. The CFPB’s analysis of the Survey of Income and Program Participation (SIPP) pooled data for 2018 to 2021 finds that Social Security beneficiaries with student loans receive an average monthly benefit of $1,524.27 The analysis also indicates that approximately 480,000 (37 percent) of the 1.3 million beneficiaries with student loans rely on these modest payments for 90 percent or more of their income,28 thereby making them particularly vulnerable to reduction in their benefits especially if benefits are offset year-round. In 2019, the average annual amount collected from individual beneficiaries was $2,232 ($186 per month).29
A recent survey from The Pew Charitable Trusts found that more than nine in ten borrowers who reported experiencing wage garnishment or Social Security payment offsets said that these penalties caused them financial hardship.30 Consequently, for many, their ability to meet their basic needs, including access to healthcare, became more difficult. According to our analysis of the Federal Reserve’s Survey of Household Economic and Decision-making (SHED), half of Social Security beneficiaries with defaulted student loans skipped a doctor’s visit and/or did not obtain prescription medication due to cost.31 Moreover, 36 percent of Social Security beneficiaries with loans in delinquency or in collections report fair or poor health. Over half of them have medical debt.32
Figure 2: Selected financial experiences and hardships among subgroups of loan borrowers
Source: CFPB analysis of the Federal Reserve Board Survey of Household Economic and Decision-making (2019-2023).
Social Security recipients subject to forced collection may not be able to access key public benefits that could help them mitigate the loss of income. This is because Social Security beneficiaries must list the unreduced amount of their benefits prior to collections when applying for other means-tested benefits programs such as Social Security Insurance (SSI), Supplemental Nutrition Assistance Program (SNAP), and the Medicare Savings Programs.33 Consequently, beneficiaries subject to forced collections must report an inflated income relative to what they are actually receiving. As a result, these beneficiaries may be denied public benefits that provide food, medical care, prescription drugs, and assistance with paying for other daily living costs.34
Consumers’ complaints submitted to the CFPB describe the hardship caused by forced collections on borrowers reliant on Social Security benefits to pay for essential expenses.35 Consumers often explain their difficulty paying for such expenses as rent and medical bills. In one complaint, a consumer noted that they were having difficulty paying their rent since their Social Security benefit usually went to paying that expense.36 In another complaint, a caregiver described that the money was being withheld from their mother’s Social Security, which was the only source of income used to pay for their mother’s care at an assisted living facility.37 As forced collections threaten the housing security and health of Social Security beneficiaries, they also create a financial burden on non-borrowers who help address these hardships, including family members and caregivers.
Existing minimum income protections fail to protect student loan borrowers with Social Security against financial hardship.
The Debt Collection Improvement Act set a minimum floor of income below which the federal government cannot offset Social Security benefits and subsequent Treasury regulations established a cap on the percentage of income above that floor.38 Specifically, these statutory guardrails limit collections to 15 percent of Social Security benefits above $750. The minimum threshold was established in 1996 and has not been updated since. As a result, the amount protected by law alone does not adequately protect beneficiaries from financial hardship and in fact no longer protects them from falling below the federal poverty level (FPL). In 1996, $750 was nearly $100 above the monthly poverty threshold for an individual.39 Today that same protection is $400 below the threshold. If the protected amount of $750 per month ($9,000 per year) set in 1996 was adjusted for inflation, in 2024 dollars, it would total $1,450 per month ($17,400 per year).40
Figure 3: Comparison of monthly FPL threshold with the current protected amount established in 1996 and the amount that would be protected with inflation adjustment
Source: Calculations by the CFPB. Notes: Inflation adjustments based on the consumer price index (CPI).
Even if the minimum protected income of $750 is adjusted for inflation, beneficiaries will likely still experience hardship as a result of their reduced benefits. Consumers with incomes above the poverty line also commonly experience material hardship.41 This suggests that a threshold that is higher than the poverty level will more effectively protect against hardship.42 Indeed, in determining an income threshold for $0 payments under the SAVE plan, the Department of Education researchers used material hardship (defined as being unable to pay utility bills and reporting food insecurity) as their primary metric, and found similar levels of material hardship among those with incomes below the poverty line and those with incomes up to 225 percent of the FPL.43 Similarly, the CFPB’s analysis of a pooled sample of SIPP respondents finds the same levels of material hardship for Social Security beneficiaries with student loans with incomes below 100 percent of the FPL and those with incomes up to 225 percent of the FPL.44 The CFPB found that for 87 percent of student loan borrowers who receive Social Security, their benefit amount is below 225 percent of the FPL.45 Accordingly, all of those borrowers would be removed from forced collections if the Department of Education applied the same income metrics it established under the SAVE program to an automatic hardship exemption program.
Existing options for relief from forced collections fail to reach older borrowers.
Borrowers with loans in default remain eligible for certain types of loan cancellation and relief from forced collections. However, our analysis suggests that these programs may not be reaching many eligible consumers. When borrowers do not benefit from these programs, their hardship includes, but is not limited to, unnecessary losses to their Social Security benefits and negative credit reporting.
Borrowers who become disabled after reaching full retirement age may miss out on Total and Permanent Disability
The Total and Permanent Disability (TPD) discharge program cancels federal student loans and effectively stops all forced collections for disabled borrowers who meet certain requirements. After recent revisions to the program, this form of cancelation has become common for those borrowers with Social Security who became disabled prior to full retirement age.46 In 2016, a GAO study documented the significant barriers to TPD that Social Security beneficiaries faced.47 To address GAO’s concerns, the Department of Education in 2021 took a series of mitigating actions, including entering into a data-matching agreement with the Social Security Administration (SSA) to automate the TPD eligibility determination and discharge process.48 This process was expanded further with new final rules being implemented July 1, 2023 that expanded the categories of borrowers eligible for automatic TPD cancellation.49 In total, these changes successfully resulted in loan cancelations for approximately 570,000 borrowers.50
However, the automation and other regulatory changes did not significantly change the application process for consumers who become disabled after they reach full retirement age or who have already claimed the Social Security retirement benefits. For these beneficiaries, because they are already receiving retirement benefits, SSA does not need to determine disability status. Likewise, SSA does not track disability status for those individuals who become disabled after they start collecting their Social Security retirement benefits.51
Consequently, SSA does not transfer information on disability to the Department of Education once the beneficiary begins collecting Social Security retirement.52 These individuals therefore will not automatically get a TPD discharge of their student loans, and they must be aware and physically and mentally able to proactively apply for the discharge.53
The CFPB’s analysis of the Census survey data suggests that the population that is excluded from the TPD automation process could be substantial. More than one in five (22 percent) Social Security beneficiaries with student loans are receiving retirement benefits and report a disability such as a limitation with vision, hearing, mobility, or cognition.54 People with dementia and other cognitive disabilities are among those with the greatest risk of being excluded, since they are more likely to be diagnosed after the age 70, which is the maximum age for claiming retirement benefits.55
These limitations may also help explain why older borrowers are less likely to rehabilitate their defaulted student loans. Specifically, 11 percent of student loan borrowers ages 50 to 59 facing forced collections successfully rehabilitated their loans,56 while only five percent of borrowers over the age of 75 do so.57
Figure 4: Number of student loan borrowers ages 50 and older in forced collection, borrowers who signed a rehabilitation agreement, and borrowers who successfully rehabilitated a loan by selected age groups
| Age Group | Number of Borrowers in Offset | Number of Borrowers Who Signed a Rehabilitation Agreement | Percent of Borrowers Who Signed a Rehabilitation Agreement | Number of Borrowers Successfully Rehabilitated | Percent of Borrowers who Successfully Rehabilitated |
|---|---|---|---|---|---|
| 50 to 59 | 265,200 | 50,800 | 14% | 38,400 | 11% |
| 60 to 74 | 184,900 | 24,100 | 11% | 18,500 | 8% |
| 75 and older | 15,800 | 1,000 | 6% | 800 | 5% |
Source: CFPB analysis of data provided by the Department of Education.
Shifting demographics of student loan borrowers suggest that the current automation process may become less effective to protect Social Security benefits from forced collections as more and more older adults have student loan debt. The fastest growing segment of student loan borrowers are adults ages 62 and older. These individuals are generally eligible for retirement benefits, not disability benefits, because they cannot receive both classifications at the same time. Data from the Department of Education reflect that the number of student loan borrowers ages 62 and older increased by 59 percent from 1.7 million in 2017 to 2.7 million in 2023. In comparison, the number of borrowers under the age of 62 remained unchanged at 43 million in both years.58 Furthermore, additional data provided to the CFPB by the Department of Education show that nearly 90,000 borrowers ages 81 and older hold an average amount of $29,000 in federal student loan debt, a substantial amount despite facing an estimated average life expectancy of less than nine years.59
Existing exceptions to forced collections fail to protect many Social Security beneficiaries
In addition to TPD discharge, the Department of Education offers reduction or suspension of Social Security offset where borrowers demonstrate financial hardship.60 To show hardship, borrowers must provide documentation of their income and expenses, which the Department of Education then uses to make its determination.61 Unlike the Debt Collection Improvement Act’s minimum protections, the eligibility for hardship is based on a comparison of an individual’s documented income and qualified expenses. If the borrower has eligible monthly expenses that exceed or match their income, the Department of Education then grants a financial hardship exemption.62
The CFPB’s analysis suggests that the vast majority of Social Security beneficiaries with student loans would qualify for a hardship protection. According to CFPB’s analysis of the Federal Reserve Board’s SHED, eight in ten (82 percent) of Social Security beneficiaries with student loans in default report that their expenses equal or exceed their income.63 Accordingly, these individuals would likely qualify for a full suspension of forced collections. Yet the GAO found that in 2015 (when the last data was available) less than ten percent of Social Security beneficiaries with forced collections applied for a hardship exemption or reduction of their offset.64 A possible reason for the low uptake rate is that many beneficiaries or their caregivers never learn about the hardship exemption or the possibility of a reduction in the offset amount.65 For those that do apply, only a fraction get relief. The GAO study found that at the time of their initial offset, only about 20 percent of Social Security beneficiaries ages 50 and older with forced collections were approved for a financial hardship exemption or a reduction of the offset amount if they applied.66
Conclusion
As hundreds of thousands of student loan borrowers with loans in default face the resumption of forced collection of their Social Security benefits, this spotlight shows that the forced collection of Social Security benefits causes significant hardship among affected borrowers. The spotlight also shows that the basic income protections aimed at preventing poverty and hardship among affected borrowers have become increasingly ineffective over time. While the Department of Education has made some improvements to expand access to relief options, especially for those who initially receive Social Security due to a disability, these improvements are insufficient to protect older adults from the forced collection of their Social Security benefits.
Taken together, these findings suggest that forced collections of Social Security benefits increasingly interfere with Social Security’s longstanding purpose of protecting its beneficiaries from poverty and financial instability. These findings also suggest that alternative approaches are needed to address the harm that forced collections cause on beneficiaries and to compensate for the declining effectiveness of existing remedies. One potential solution may be found in the Debt Collection Improvement Act, which provides that when forced collections “interfere substantially with or defeat the purposes of the payment certifying agency’s program” the head of an agency may request from the Secretary of the Treasury an exemption from forced collections.67 Given the data findings above, such a request for relief from the Commissioner of the Social Security Administration on behalf of Social Security beneficiaries who have defaulted student loans could be justified. Unless the toll of forced collections on Social Security beneficiaries is considered alongside the program’s stated goals, the number of older adults facing these challenges is only set to grow.
Data and Methodology
To develop this report, the CFPB relied primarily upon original analysis of public-use data from the U.S. Census Bureau Survey of Income and Program Participation (SIPP), the Federal Reserve Board Board’s Survey of Household Economics and Decision-making (SHED), U.S. Department of the Treasury, Fiscal Data portal, consumer complaints received by the Bureau, and administrative data on borrowers in default provided by the Department of Education. The report also leverages data and findings from other reports, studies, and sources, and cites to these sources accordingly. Readers should note that estimates drawn from survey data are subject to measurement error resulting, among other things, from reporting biases and question wording.
Survey of Income and Program Participation
The Survey of Income and Program Participation (SIPP) is a nationally representative survey of U.S. households conducted by the U.S. Census Bureau. The SIPP collects data from about 20,000 households (40,000 people) per wave. The survey captures a wide range of characteristics and information about these households and their members. The CFPB relied on a pooled sample of responses from 2018, 2019, 2020, and 2021 waves for a total number of 17,607 responses from student loan borrowers across all waves, including 920 respondents with student loans receiving Social Security benefits. The CFPB’s analysis relied on the public use data. To capture student loan debt, the survey asked to all respondents (variable EOEDDEBT): Owed any money for student loans or educational expenses in own name only during the reference period. To capture receipt of Social Security benefits, the survey asked to all respondents (variable ESSSANY): “Did ... receive Social Security benefits for himself/herself at any time during the reference period?” To capture amount of Social Security benefits, the survey asked to all respondents (variable TSSSAMT): “How much did ... receive in Social Security benefit payment in this month (1-12), prior to any deductions for Medicare premiums?”
The public-use version of the survey dataset, and the survey documentation can be found at: https://www.census.gov/programs-surveys/sipp.html
Survey of Household Economics and Decision-making
The Federal Reserve Board’s Survey of Household Economics and Decision-making (SHED) is an annual web-based survey of households. The survey captures information about respondents’ financial situations. The CFPB relied on a pooled sample of responses from 2019 through 2023 waves for a total number of 1,376 responses from student loan borrowers in collection across all waves. The CFPB analysis relied on the public use data. To capture default and collection, the survey asked all respondents with student loans (variable SL6): “Are you behind on payments or in collections for one or more of the student loans from your own education?” To capture receipt of Social Security benefits, the survey asked to all respondents (variable I0_c): “In the past 12 months, did you (and/or your spouse or partner) receive any income from the following sources: Social Security (including old age and DI)?”
The public-use version of the survey dataset, and the survey documentation can be found at https://www.federalreserve.gov/consumerscommunities/shed_data.htm
Appendix A: Number of student loan borrowers ages 60 and older, total outstanding balance, and average balance by age group, August 2024
| Age Group | Borrower Count (in thousands) | Balance (in billions) | Average balance |
|---|---|---|---|
60 to 65 |
1,951.4 |
$87.49 |
$44,834 |
66 to 70 |
909.8 |
$39.47 |
$43,383 |
71 to 75 |
457.5 |
$18.95 |
$41,421 |
76 to 80 |
179.0 |
$6.80 |
$37,989 |
81 to 85 |
59.9 |
$1.90 |
$31,720 |
86 to 90 |
20.1 |
$0.51 |
$25,373 |
91 to 95 |
7.0 |
$0.14 |
$20,000 |
96+ |
2.8 |
$0.05 |
$17,857 |
Source: Data provided by the Department of Education.
The endnotes for this report are available here.
Biden-Harris Administration Announces Final Student Loan Forgiveness and Borrower Assistance Actions (US Department of Education)
Total Approved Student Debt Relief Reached Almost $189 Billion for 5.3 Million Borrowers
The Biden-Harris Administration today announced its final round of student loan forgiveness, approving more than $600 million for 4,550 borrowers through the Income-Based Repayment (IBR) Plan and 4,100 individual borrower defense approvals. The Administration leaves office having approved a cumulative $188.8 billion in forgiveness for 5.3 million borrowers across 33 executive actions. The U.S. Department of Education (Department) today also announced that it has completed the income-driven repayment payment count adjustment and that borrowers will now be able to see their income-driven repayment counters when they log into their accounts on StudentAid.gov. Finally, the Department took additional actions that will allow students who attended certain schools that have since closed to qualify for student loan discharges.
“Four years ago, President Biden made a promise to fix a broken student loan system. We rolled up our sleeves and, together, we fixed existing programs that had failed to deliver the relief they promised, took bold action on behalf of borrowers who had been cheated by their institutions, and brought financial breathing room to hardworking Americans—including public servants and borrowers with disabilities. Thanks to our relentless, unapologetic efforts, millions of Americans are approved for student loan forgiveness,” said U.S. Secretary of Education Miguel Cardona. “I’m incredibly proud of the Biden-Harris Administration’s historic achievements in making the life-changing potential of higher education more affordable and accessible for more people.”
From Day One the Biden-Harris Administration took steps to rethink, restore, and revitalize targeted relief programs that entitle borrowers to relief under the Higher Education Act but that failed to live up to their promises. Through a combination of executive actions and regulatory improvements, the Biden-Harris Administration produced the following results for borrowers:
Fixed longstanding problems with Income-Driven Repayment (IDR). The Administration has approved 1.45 million borrowers for $57.1 billion in loan relief, including $600 million for 4,550 borrowers announced today for IBR forgiveness.
IDR plans help keep payments manageable for borrowers and have provided a path to forgiveness after an extended period. These plans started in the early 1990s, but prior to the Biden-Harris Administration taking office, just 50 borrowers had ever had their loans forgiven. The Administration corrected longstanding failures to accurately track borrower progress toward forgiveness and addressed past instances of forbearance steering whereby servicers inappropriately advised borrowers to postpone payments for extended periods of time. These totals also include borrowers who received forgiveness under the Saving on a Valuable Education (SAVE) plan prior to court orders halting forgiveness under the SAVE plan.
Today, the Department also announced the completion of the IDR payment count adjustment, correcting eligible payment counts. While the payment count adjustment is now complete, borrowers who were affected by certain servicer transitions in 2024 may see one or two additional months credited in the coming weeks. The Department is also launching the ability for borrowers to track their IDR progress on StudentAid.gov. Borrowers can now log in to their accounts and see their total IDR payment count and a month-by-month breakdown of progress.
Restored the promise of Public Service Loan Forgiveness (PSLF). The Administration has approved 1,069,000 borrowers for $78.5 billion in forgiveness.
The PSLF Program provides critical support to teachers, service members, social workers, and others engaged in public service. But prior to this Administration taking office, just 7,000 borrowers had received forgiveness and the overwhelming majority of borrowers who applied had their applications denied. The Biden-Harris Administration fixed this program by pursuing regulatory improvements, correcting long-standing issues with tracking progress toward forgiveness and misuse of forbearances, and implementing the limited PSLF waiver to avoid harm from the pandemic.
Automated discharges and simplified eligibility criteria for borrowers with a total and permanent disability. The Administration has approved 633,000 borrowers for $18.7 billion in loan relief.
Borrowers who are totally and permanently disabled may be eligible for a total and permanent disability (TPD) discharge. The Biden-Harris Administration changed regulations to automatically forgive loans for eligible borrowers based upon a data match with the Social Security Administration (SSA). This helped hundreds of thousands of borrowers who were eligible for relief but hadn’t managed to navigate paperwork requirements. The Department also made it easier for borrowers to qualify for relief based upon SSA determinations, made it easier to complete the TPD application, and eliminated provisions that had caused many borrowers to have their loans reinstated.
Delivered long-awaited help to borrowers ripped off by their institutions, whose schools closed, or through related court settlements. The Administration has approved just under 2 million borrowers for $34.5 billion in loan relief.
For years, students had sought relief from the Department through borrower defense to repayment—a provision that allows borrowers to have their loans forgiven if their college engaged in misconduct related to the borrowers’ loans. The Department delivered long-awaited relief to borrowers who attended some of the most notoriously predatory institutions to ever participate in the federal financial aid programs. This included approving for discharge all remaining outstanding loans from Corinthian Colleges, as well as group discharges for ITT Technical Institute, the Art Institutes, Westwood College, Ashford University, and others. The Department also settled a long-running class action lawsuit stemming from allegations of inaction and the issuance of form denials, allowing it to begin the first sustained denials of non-meritorious claims.
Today, the Department also approved 4,100 additional individual borrower defense applications for borrowers who attended DeVry University, based upon findings announced in February 2022.
“For decades, the federal government promised to help people who couldn’t afford their student loans because they were in public service, had disabilities, were cheated by their college, or who had completed decades of payments. But it rarely kept those promises until now,” said U.S. Under Secretary of Education James Kvaal. “These permanent reforms have already helped more 5 million borrowers, and many more borrowers will continue to benefit.”
The table below compares the progress made by the Biden-Harris Administration in these key discharge areas compared to other administrations.
| Borrowers approved for forgiveness | ||
| Prior Administrations | Biden-Harris Administration | |
| Borrower Defense (Since 2015) | 53,500 | 1,767,000* |
| Public Service Loan Forgiveness (Since 2017) | 7,000 | 1,069,000 |
| Income-Driven Repayment (all-time) | 50 | 1,454,000 |
| Total and Permanent Disability (Since 2017) | 604,000 | 633,000 |
* Includes 107,000 borrowers and $1.25 billion captured by an extension of the closed-school lookback window at ITT Technical Institute.
Additional actions related to closed school discharges
The Department today also announced additional actions that will make more borrowers eligible for a closed school loan discharge. Generally, a borrower qualifies for a closed school discharge if they did not complete their program and were either still enrolled when the school closed or left without graduating within 120 days before it closed. . However, the Department has determined that several schools closed under exceptional circumstances that merit allowing borrowers who did complete and were enrolled in the school more than 120 days prior to the closure to qualify for a closed school discharge. justify extending the look-back window beyond the applicable 120 or 180 days--allowing additional borrowers to qualify for a closed school discharge. Generally, eligible borrowers will have to apply for these discharges, but the Secretary has directed Federal Student Aid to make borrowers aware of their eligibility, and to pursue automatic discharges for those affected by closures that took place between 2013 and 2020 and who did not enroll elsewhere within three years of their school closing.
These adjusted look-back windows are:
- To May 6, 2015, for all campuses owned at the time by the Career Education Corporation (CEC), which have since closed. That is the day CEC announced it would close or sell all campuses except for two brands. This affected the Art Institutes, Le Cordon Bleu, Brooks Institute, Missouri College, Briarcliffe College, and Sanford-Brown.
- To December 16, 2016, for campuses owned by the Education Corporation of America (ECA) on that date that closed. ECA operated Virginia College, Brightwood College, EcoTech, and Golf Academies and started on the path to closure after its accreditation agency lost federal recognition and ECA could not obtain accreditation elsewhere.
- To October 17, 2017 for all campuses owned or sold on that date by the Education Management Corporation (EDMC) and that later closed. That is the day EDMC sold substantially all of its assets to Dream Center Educational Holdings. The decision affects borrowers who attended the Art Institutes, including the Miami International University of Art & Design and Argosy University.
- To April 23, 2021, for Bay State College. That is the day this Massachusetts-based college began to face significant accreditation challenges, which eventually led to the school losing accreditation and closing in August 2023.
Borrowers who want more information about closed school discharge, including how to apply, can visit StudentAid.gov/closedschool.
A state-by-state breakdown of various forms of student debt relief approved by the Biden-Harris Administration is available here.
Our First FOIAs of 2025
The Higher Education Inquirer has started the year by digging deeper into the Federal Student Loan Portfolio using the Freedom of Information Act (FOIA) process. If you would like to know something that has not been made public by the US Department of Education (ED), please contact us. ED has a number of additional websites for public information, such as the College Scorecard, Federal Student Aid website, College Navigator, IPEDS data website, and the Closed Schools Monthly Report. But the availability of good data could be reduced in coming years. As usual, we appreciate your comments below.
Thursday, January 16, 2025
Feds Cancel Debts for 261,000 Students of Disgraced School Now Run by U. of Arizona (David Halperin)
The announcement brings some measure of relief and justice to a huge number of former students of Ashford, which evolved from a single campus in Iowa that Zovio acquired in 2005 to a massive, high-priced, poor-quality, mostly-online school that got billions from taxpayers while leaving many worse off than when they enrolled. Ashford and Zovio were held liable and penalized $20 million for scamming students by a California court following a 2022 trial brought by that state’s attorney general. The verdict was upheld on appeal.
The former students were enrolled at Ashford by aggressive recruiters who told a lot of falsehoods but could say, truthfully, that the school was approved for federal student grants and loans by the Department of Education. The Department let these students down by keeping its good housekeeping seal on the school and thus keeping predatory Ashford eligible for taxpayer money. The Biden administration deserves credit for at last righting some of this wrong.
The California trial echoed numerous past reports of abuses by Zovio and Ashford. In fact, at a hearing focused on Ashford way back in 2011, then-Senator Tom Harkin (D-IA) declared Ashford “an absolute scam.” The California court found that Zovio and Ashford “created a high pressure culture in admissions that prioritized enrollment numbers over compliance.” The case included detailed testimony from Ashford employees about a deceptive operation engineered by senior Zovio executives — and about numerous lives ruined by a school that never earned the certifications that would allow graduates to even be eligible for the teaching, social work, and other jobs they sought.
Unfortunately for today’s students, Ashford continues to operate. It just changed its name to University of Arizona Global Campus (UAGC). In August 2020, Zovio sold Ashford to the University of Arizona, in a shady deal that allowed Zovio to hide the school under the apron of the powerful state university and shed the stigma that for-profit schools like Ashford had brought upon themselves — and yet still permit Zovio to make big money with a long term contract to run Ashford’s operations. After the California verdict, the University of Arizona forced Zovio out of the arrangement, but it hired most of Zovio’s employees and carried on with Zovio’s playbook. Mounting evidence of financial losses and continued predatory practices at the school likely played a role in the resignation of the school’s president last year.
The Department said that the California AG office had requested today’s loan discharges for Ashford students, based on evidence developed in its lawsuit “around widespread misrepresentations in nine separate areas, including students’ ability to obtain needed licensure, transfer credits, the cost and amount of financial aid, and the time it would take to earn a degree.” The Department said it conducted its own review of the evidence before acting.
Ashford has been sued or investigated by other federal and state agencies, including the U.S. Justice Department, Securities and Exchange Commission, and Consumer Financial Protection Bureau, and the attorneys general of Iowa, Massachusetts, New York, and North Carolina. A 2015 settlement with the CFPB forced Ashford to discharge $23.5 million in high-interest private loans and pay an $8 million civil penalty.
“Numerous federal and state investigations have documented the deceptive recruiting tactics frequently used by Ashford University,” U.S. Under Secretary of Education James Kvaal said in a statement today. “In reality, 90 percent of Ashford students never graduated, and the few who did were often left with large debts and low incomes. Today’s announcement will finally provide relief to many students who were harmed by Ashford’s illegal actions.”
In 2023 the Department announced $72 million in debt cancellation for more than 2,300 Ashford borrowers who who applied for relief. But with today’s action, a much larger group of former Ashford students will get automatic relief, without having to apply and prove their cases. The Department says it will email former Ashford students informing them of the discharge.
When it announced that first $72 million in relief in 2023, the Department said it planned to come after the University of Arizona to recoup the losses, which federal permits. Today’s announcement creates an even greater risk of liability for the state school. U of A has denied it would be responsible, but its purchase agreement with Zovio suggests otherwise.
Separately, the Department issued a Notice of Proposed Government-Wide Debarment from Federal Procurement and Non-Procurement Transactions to Clark, the founder and former CEO of Zovio — aiming at a decision that would, among other things, prevent Clark from working as a principal or executive of any college getting federal aid.
In a statement today, the Department said it was acting against Clark “because Ashford violated federal regulations regarding making substantial misrepresentations. The evidence from the California litigation, and other sources, which the Department independently reviewed, is mountainous. The conduct of Ashford can be imputed to Mr. Clark because he participated in, knew, or had reason to know of Ashford’s misrepresentations. Mr. Clark not only supervised the unlawful conduct, he personally participated in it, driving some of the worst aspects of the boiler-room-style recruiting culture.”
The Department said it would refer the proposed debarment to its Office of Hearings and Appeals, with a recommendation that Clark be banned for “not less than three years .” (Three years?) Clark would have an opportunity to oppose the move.
I’m not sure Clark will bother, if indeed the debarment effort goes forward under the administration of former Trump University head Donald J. Trump. Clark’s last reported job on his LinkedIn page is as CEO of Zovio, which went out of business in 2022. Clark made tens or even hundreds of millions running Zovio, with annual compensation topping $20 million in at least one year.
Clark abruptly left the company in 2021. Others responsible for awful Zovio, which changed its name from Bridgepoint Education in 2019, include Ryan Craig, a private equity man who served on the board from 2003 to 2022, and Robert Eitel, who worked at the company from 2015 to 2017 and later was one of Betsy DeVos’s top aides in the first Trump Department of Education.
On Monday, the Department of Education granted similar automatic debt relief to 73,600 borrowers who attended schools of the disgraced chain Center for Excellence Higher Education. That operation’s CEO, Eric Juhlin, was similarly debarred by the Department in 2021.
Unfortunately for today’s students, who will now be at the mercy of the incoming Trump administration, in addition to Ashford-n0w-UAGC, there are still many awful, large for-profit chains still running, including Perdoceo and the University of Phoenix.
There’s one other thing the Biden administration could do to halt Ashford’s abuses before it turns over the keys to the Trump administration, which last time did almost everything possible to help predatory schools abuse students: It could act on the long-pending application by Arizona to approve the change of ownership of Ashford. It should reject the application. And the University of Arizona should shut down this scam school once and for all.
When I first got involved in the issue of for-profit colleges, back in 2010, I received a phone call from a man who said he was on a golf course in the San Diego area, where Zovio, then called Bridgepoint, was located. He said that a bunch of Bridgepoint executives were playing golf while loudly mocking Ashford students. He held up the phone so I could hear the laughter.
Wednesday, January 15, 2025
University of Colorado sued for free speech violations over response to Israel-Hamas war protest (John Herrick)
[Editor's note: This article first appeared at the Boulder Reporting Lab.]
A University of Colorado Boulder student and an employee filed a lawsuit in the U.S. District Court on Jan. 10, alleging the university violated their free speech rights following a protest related to the war in Gaza.
Sophomore Mari Rosenfeld and recent graduate Max Inman, the plaintiffs, claim CU Boulder retaliated against them for participating in an Oct. 3 protest organized by Students for Justice in Palestine (SJP) during a career fair at the University Memorial Center.
The lawsuit follows several other legal challenges against universities nationwide over restrictions on student protests over the Israel-Hamas war. These cases often underscore a tension universities face in balancing the protection of free speech with maintaining campus order.
According to the complaint, Rosenfeld and Inman sought to oppose U.S. support for Israel and the involvement of corporations allegedly linked to the war. Inman entered the University Memorial Center’s Glenn Miller Ballroom, where the career fair was held, and used a bullhorn to claim that corporations attending the job fair were profiting from the war. A police officer then directed the protesters to leave and they left, according to the lawsuit.
The next day, the university issued an “interim exclusion” order barring Rosenfeld and Inman from attending certain university activities — except for classes — and placed SJP in “bad standing,” effectively revoking its status as a recognized student organization, according to the lawsuit. The plaintiffs argue these actions violated their First and Fourteenth Amendment rights, as well as a state law protecting student protests.
“Plaintiffs are being singled out based on their viewpoint and the content of their speech by Defendant University of Colorado Boulder and its administration in an effort to stifle further demonstrations,” the lawsuit states.
Rosenfeld and Inman allege the punishment also prevented them from working the on-campus portions of their jobs. They are seeking monetary damages and a court order to prohibit the university from barring future pro-Palestinian protests at the UMC. They are also seeking an order to remove disciplinary notations related to the protest from their student records.
The lawsuit names the University of Colorado and CU Boulder’s chancellor, Justin Schwartz, dean of students, Devin Cramer, and deputy dean of students, Holly Nelson. The university has not yet been served the lawsuit, according to a spokesperson. The spokesperson said the campus would review the filing and determine its response but declined to comment further.
The case reflects a broader national trend of universities cracking down on student activism related to the Israel-Hamas war. During the peak in the spring and summer 2024, universities imposed stricter rules, issued suspensions and called in police to arrest students — though many charges were later dropped. While some campuses have seen large-scale protests, CU Boulder has not experienced such encampments.
“Banning students from campus to prevent them
from speaking out about an unjust war cannot go unchallenged,” Dan
Williams, a lawyer with the local civil rights firm Hutchinson Black and
Cook who is representing the plaintiffs. “I’m pleased to be fighting
for the rights of these students to have their voices heard.”
Unlocking Transparency (US Department of Education)
So, what is open data? Simply put, it’s data that is made publicly available for anyone to use, analyze, and share, without restrictions. It’s about making information accessible to solve problems, spark creativity, and improve decision-making across all sectors of society. Here’s what ED is doing to ensure education data is open to the public.
ED’s Open Data Plan focuses on the improvement of existing open data practices at the Department. The four key actions and related tasks described in the Plan are intended to address any gaps of the Department’s open data practices. The key actions in the Plan are inspired by the FAIR data principles. These guidelines remind data stewards within ED to focus on the findability, accessibility, interoperability, and reusability of our digital assets which enhances the utility and value of education data for the public.
Each key action is supported by related tasks and the approach for how each task will be implemented. Further, each task identifies short-term activities intended to be implemented over a two-year horizon (2025-2027) with measurable benchmarks reviewed at least annually to determine impact and to document completion. With the Department's inaugural Open Data Plan, ED is piloting tasks and benchmarks during these first two years to help identify an improved and more effective path forward. This work will inform improvements, longer-term actions, and a roadmap for future work.
The Open Data Plan is another step toward establishing transparency as the standard across ED, ensuring openness and accessibility are the norm for our data assets. It’s about creating a space where education data is not locked away or released in a manner that benefits only some stakeholders; but shared openly, fueling collaboration, innovation, and trust. One of the main objectives of open data, and ED’s Open Data Plan, is to foster a world where anyone, anywhere, can access the information they need to make informed decisions.
Austerity in California
Ben Unglesbee at Higher Ed Dive this week wrote about the coming budget cuts to the University of California System and the Cal State University System. Something that EdSource, a California-based media outlet, has been reporting on for months.
Those devastating cuts, amounting to $650 million, are part of a long and important history of US higher education and austerity, beginning with Ronald Reagan when he was Governor of California. Those ideas, at least in part, continued under other administrations, as they reduced higher education for working-class citizens, especially African Americans, while giving greater opportunities to foreigners, including elite noncitizens.
These policies and other regressive actions drove millions of folks out of California. And those policies have spread to other states, making higher education less accessible and less responsive to working-class Americans. It's no wonder that so many have become cynical about the higher education system.
For now, the UC System can absorb these funding losses, but the Cal State System and the people who are served by that system, will not be as resilient. On a small scale, this is another symptom of the decline of US democracy and the slow decline of the American Empire, something few folks in higher education will admit, or even discuss.
Related links:
University of California Academic Workers Strike For Economic Justice
State Universities and the College Meltdown
Tuesday, January 14, 2025
The Harsh Truth Behind the Los Angeles Wildfires (Stephanie Pincetl)
UCLA Professor Stephanie Pincetl is calling the wildfires in Los Angeles a biblical-level catastrophe at least a century in the making. Pincetl teaches at the UCLA Institute of the Environment and Sustainability and is Director of the California Center for Sustainable Communities, specializing in land use and the interaction between urban development and wildfire risks.