college graduation (Photo credit: TIMOTHY A. CLARY/AFP via Getty Images)
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These colleges just cancelled $17 million of student debt.
Here’s what you need to know.
Another group of colleges cancelled student debt for its students. Connecticut State Colleges and Universities (CSCU) will cancel $17 million in studet debt for community college students due to the Covid-19 pandemic. Here are the details:
will impact 18,161 students;
includes both current and former students;
student debt cancelled for accout balances from summer 2019 through spring 2021;
funded from the federal government; and
there are no conditions for students to get student debt forgiveness
Specifically, Connecticut State Colleges and Universities paid for the student debt forgiveness with funds from the Higher Education Emergency Relief Fund. This is a federal grant program that helps colleges and universities to discharge student debt due to the Covid-19 pandemic. The outstanding account balances were money that students owed directly to the colleges, rather than private loan owed to a lender or federal student loans owed to the government. Since 2020, Connecticut State Colleges and Universities has used stimulus funds to distribute more than $56 million in direct payments to students.
“Community college students have been hit especially hard by COVID-19,” CSCU President Terrence Cheng said. “By eliminating the debt those students owe to institutions, we are removing a hurdle that prevents far too many people from continuing their educational journeys. Our message to students is simple: you now have a clean slate, so if an account balance was standing in your way, you can now register for classes for the fall semester.”
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Connecticut State Colleges and Universities is among the first to cancel student debt for community college students (compared with students at four-year colleges), who have been hit especially hard during the Covid-19 pandemic. In recent months, multiple colleges have cancelled student debt for students in response to Covid-19. For example, South Carolina State University, the state’s only public Historically Black College and University (HBCU), cancelled $9.8 million of student debt for 2,500 students. Like Connecticut State Colleges and Universities, South Carolina State University accessed federal funds, including the Cares Act and the American Rescue Plan. Dallas College cancelled student loan debt for 14,000 students through the Emergency Fund For Colleges. Wilberforce University, America’s oldest private historically black university, cancelled all student loan debt and fines owed to the school from the classes of both 2020 and 2021. The announcement came only one day after President Joe Biden dropped student loan cancellation from his latest budget. Delaware State University, a public historically black university, cancelled up to $730,655 in student loan debt for more than 220 recent graduates who faced financial hardship during the Covid-19 pandemic. Like South Carolina State University, Delaware State used funds from the American Rescue Plan to fund student loan cancellation.
Many student loan borrowers are asking whether student loan cancellation got cancelled. Without a clear path to wide-scale student loan cancellation, student loan borrowers are wondering what’s next for student loan repayment. This is despite the fact that Biden has cancelled $3 billion of student loans. However, it raises questions about who, if anyone, will cancel student debt. Will it be the government? Will it be colleges? Will it be employers? A combination? These colleges have proactively cancelled student debt with federal stimulus funds. However, some wonder whether this trend wll continue.
Will more colleges cancel student debt — including private and federal student loans?
Will colleges use stimulus funds, or will they use their own money?
Will more colleges eliminate student loans through a “no student loans” policy?
Will the cost of tuition be reduced so that college is more affordable and students can borrower fewer student loans?
In the meantime, make sure you have a game plan for your student loans. The best thing you can do now is to be proactive about your student loans. Here are some potential options to consider: