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Coronavirus stimulus checks: University cancels student loans using Biden’s stimulus money


Coronavirus, stimulus checks, Student Loan, debt, cancel, Biden

President Joe Biden’s $1.9 trillion stimulus package came with no direct aid for students. However, the indirect coronavirus stimulus checks to students in the form of funding for colleges and universities to cancel student loan debt, are now starting to benefit some.

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Coronavirus stimulus checks: DSU cancels student loan

Delaware State University, last week, announced that it is canceling over $700,000 in student loans for the students hit hardest by the coronavirus pandemic. The university noted that it would cancel $730,655 in debt for over 220 students. Further, the DSU said an average eligible student would get about $3,276 in debt relief.

“Too many graduates across the country will leave their schools burdened by debt, making it difficult for them to rent an apartment, cover moving costs, or otherwise prepare for their new careers or graduate school," DSU's Vice President for strategic enrollment management, Antonio Boyle said in a statement.

The updated policy guidance issued by the U.S. Department of Education Secretary in March says that colleges and universities can use the stimulus funds to assist students in several ways. It includes cancelling student debt, such as unpaid institutional debts, which is a debt owed directly to a college or university.

Generally, institutional debt does not qualify for federal student loan relief and forgiveness programs. If a student fails to repay the loan, it may result in the university withholding their academic transcript, and other stern actions. Thus, this appears to be a good move to genuinely help students amid the pandemic.

University President Tony Allen noted that canceling the student loan is in line with DSU’s initiatives to keep student debt manageable. Allen said DSU hasn’t raised its tuition fee in six years and every incoming student gets an iPad or MacBook.

“…our Early College High School saves the average family of nearly $50,000 in college expenses,” Allen said.

In an annual US News & World Report assessment of America’s top colleges last year, the DSU was among the top 1% in Social Mobility.

Will your student loans be cancelled?

Meanwhile, discussions are ongoing over canceling student loans on a wider scale. Student loan borrower advocates continue to push Biden to cancel up to $50,000 of student loans. President Biden has already asked the U.S. Department of Education and the Department of Justice to assess the options for student loan forgiveness.

Moreover, those in favor of canceling student loan debt welcomed the Biden administration’s recent move. Education Secretary Miguel Cardona recently announced that Richard Cordray would lead the office overseeing the loan portfolio.

Cordray, who is known to be a fierce critic of the student loan industry, has been named as the COO (chief operating officer) of Federal Student Aid at the Education Department.

The post Coronavirus stimulus checks: University cancels student loans using Biden’s stimulus money appeared first on ValueWalk.


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