150+ colleges have cleared student balances, with more expected

Recognizing that even small financial hurdles can derail a student’s education, a number of colleges and universities are using federal pandemic relief funds to clear debts for unpaid tuition and fees. At least 150 U.S. institutions have said they will forgive outstanding balances accumulated during the pandemic by current students and recent graduates—and more are likely to follow their lead, according to a Washington Post analysis.

In speaking with higher education associations to put together its “informal tally,” the Post found that a range of institution types are wiping student balances. Those schools include small, private four-year colleges, large public systems, dozens of community colleges, at least two dozen historically Black colleges and universities (HBCUs), and 18 tribal colleges and universities.

“I suspect you’ll see many more schools also making this move to help students out who have been impacted by circumstances caused by the pandemic,” David K. Sheppard, chief legal officer and chief of staff at the Thurgood Marshall College Fund, told The Chronicle of Higher Education.

Related: HBCUs clear students’ unpaid balances to lighten debt burden >

Pandemic relief funds help clear the ledger

Institutions from coast to coast are funding debt forgiveness—which affects only debts owed to the school, not private or federal student loans—with some of the $76.2 billion that Congress provided in federal pandemic relief for colleges and universities. Legislators earmarked a portion of those funds specifically for direct student aid, and the Biden administration in March clarified that colleges and universities could use those grants to pay off student balances accumulated enduring the pandemic.

That March announcement was “like the Wizard of Oz going from black and white to color,” Patricia McGuire, president of Trinity Washington University told the Post. “I suddenly saw a path forward,” she said. Noticing that students at the small, Washington, D.C.-based private women’s college had incurred large debts, Trinity administrators decided to clear the balances of nearly 400 undergraduates, who owed more than $1.8 million.

On the other end of the size spectrum is City University of New York (CUNY), which recently said it will eliminate the overdue balances of at least 50,000 students. The public system enrolls 500,000 students, and a large percentage are from low-income households. CUNY expects the debt forgiveness, which covers bills spanning from spring 2020 to spring 2021, to total around $125 million.

Removing a key obstacle

Although the debt forgiveness won’t shrink students’ loan balances, experts say it still can make a big difference, providing current students an opportunity to register for classes and finish their degrees, giving recent grads access to their diplomas, and increasing the chance that students can build wealth.

Related: Rethinking transcript holds for students with outstanding balances >

“Whatever we could do to assist students to come back to campus, to come back to their education, we wanted to do,” said Makola M. Abdullah, president of Virginia State University, an HBCU that has cleared debts totaling $1.5 million for around 1,200 of its 5,400 students. “We didn’t want to let their finances be determinant of whether they were able to come back to school and finish their education or, in some cases, start their education,” he said.

Urging federal officials to pursue lasting change

While applauding the wave of debt forgiveness, some experts are urging policy makers to find more permanent ways to address the financial strain experienced by low-income students and institutions in economically vulnerable regions.

Trinity’s McGuire says she hopes legislators will double the maximum Pell Grant and re-examine policies like the current regulation that prohibits students from taking out federal loans to pay off an existing college balance.

Dominique Baker, an assistant professor of education policy at Dallas-based Southern Methodist University, echoed the call. “There is real space for the federal government to consider ways to create programming that would say ‘we will waive these fees for you to come back to school and finish,’” she said. “It’s pretty clear at this point that this is a problem.”

Topics in this story

Next Up

Hoping to shrink debt burden, Walmart drops fees from tuition benefit

Three years after the launch of its tuition-assistance program, the nation’s largest private employer announced it will drop the program’s $1-a-day fee and fully cover associates’ college tuition and books.