COLUMBUS, Ohio (WCMH) – Forty-six million Americans are staggering under the weight of $1.75 trillion worth of student debt, with only mortgages accounting for more debt for an average family.
Former Ohio Attorney General Richard Cordray is the chief operating officer for the Federal Student Loan Program.
“Whatever the White House decides, we will aggressively seek to implement it for people to make sure that we follow through,” Cordray said.
He’s referring to pressure from progressives who want sweeping debt cancellation, as well as Republicans who said that will exacerbate inflation and cost taxpayers in the end.
According to sources, the Biden administration is developing a plan to forgive $10,000 worth of debt for each individual borrower.
“Well, I generally agree with the point that you take out a loan, you pay it back,” Cordray said. “That’s the promise you make. On the other hand, there is a variety of issues.”
Those issues include a promise made by Congress in 2007 for loan forgiveness for anyone who works for 10 years in public service for the government or a non-profit organization.
“But the administration of the program got so entangled at the Department of Education that 14 years later — that is more than 10 years – 14 years later, there were only about 6,500 people across the country who achieved total loan forgiveness through that program,” Cordray said.
He said in the past year, his office cut through the red tape and about 120,000 public servants saw total loan forgiveness, and a million more are in the pipeline.
Loan forgiveness is also available for anyone who becomes permanently disabled. Thanks to a data match with the Social Security Administration, 400,000 people on disability got debt relief.
Cordray would also like to see the interest rate on student loans addressed.
“I think that is a problem and, of course, Congress sets the interest rates and they have tried to set them in a way that protects the federal government, but therefore, they are generally fairly high,” he said.
Perhaps the greatest source of relief will come through revisions to the income-driven repayment plan that Cordray said is being streamlined and expanded.
“Which is meant to say that if you cannot afford to make the payment on your loan because of interest or other issues, you can qualify for an income-driven repayment which is calibrated to how much you actually make. so that it is realistic for you,” he said.