COLUMBUS, Ohio — Even though the U.S. Supreme Court decided on Thursday that billions in student loan debt can be forgiven for students who claim they were defrauded by the schools they attended, some Ohioans feel concerned after Attorney General Dave Yost tried to block the settlement from the class action suit.
Yost signed on to an amicus brief with 19 other Republican attorneys general asking for the court not to forgive debt for 200,000 Americans who were allegedly defrauded by over 150 for-profit colleges, including Chamberlain University, DeVry University and Kaplan College, all of which have locations in Ohio.
A settlement was already approved in the lawsuit, Sweet v. Cardona, but was continuously being challenged. The Supreme Court took the case and declined to intervene in the class-action settlement.
"The executive branch does not have unlimited policymaking power, nor an unlimited bank account to forgive student loan debt,” Yost said in a news release announcing why he was against the settlement. “The executive branch cannot extend its authority as it sees fit.”
Yost's rhetoric and legal actions in the Sweet v. Cardona case mirror his feelings about President Biden's national student loan forgiveness actions, which has student loan borrowers across the state worried.
Ohio borrowers
Ohio has more than 1,800,000 borrowers, according to the U.S. Department of Education.
Rachel Coyle, a millennial and progressive activist, is one of them.
She has $19,053.77 left in her student loans. She graduated in 2011 from OSU and went back to school to get her Masters.
"It was close to $40,000, including scholarships and things," she said about the total. "I've been paying it off since about 2015."
The past two years have been a relief for her. The pandemic stopped student loan payments, which gave her the savings she needed to finally start a small business.
Last year, she got even better news, she said. President Joe Biden’s mass student debt relief plan would forgive up to $10,000 in federal student loans for people with annual incomes of $125,000 or less.
"I would be down to about $9,000, which is a lot more manageable — would make me feel a lot more comfortable making purchases for my business and making purchases in life like buying a new car," she said.
The morning of her interview with News 5, her car broke down.
"Anxiety is high," she nervously chuckled. "[Loan payments are] absolutely having an effect on my decisions on what I'm able to purchase right now."
The forgiveness plan has been caught up in the U.S. Supreme Court, which Ohio Attorney General Dave Yost was glad to see.
"Yost and many other Republicans are not enthusiastic about the federal government stepping in on what they see as sort of a private market," said Michael Goldberg, financial expert and professor at Case Western Reserve University. "These folks took on the debt and they need to pay it back; the government shouldn't step in to help.'"
Yost hasn’t always felt this way.
Yost and loans
Back in 2019, Yost argued that the federal government should make it easier to forgive the student loans of thousands of disabled veterans.
In that case, he requested the Dept. of Education (DOE) to automatically discharge the student loans of veterans determined by the Department of Veterans Affairs to be eligible for such relief, according to a press release from 2019.
“There is nothing our nation could possibly do for these brave men and women that is ever going to be repayment enough,” Yost said at the time. “This is one area in which we can guarantee them the relief they so richly deserve – and that they already are entitled to under the law.”
The letter he signed onto told DOE to halt debt collection efforts targeting disabled veterans and clear their credit reports of any negative reporting related to their student loans.
At the core of it, he was asking ODE to overhaul a system to forgive debt. Now, Yost believes that ODE settling to forgive debt to students who were defrauded is “nothing more than an egregious power grab that tramples all over the separation-of-powers doctrine."
When asked about his change of heart, a spokesperson for his team said that there has been no change of heart.
"The difference is clear: One is a federal law that the AG wants to make automatic instead of making a disabled veteran apply vs. a dictate by an administration to effectively establish a new law," AG spokesperson Hannah Hundley said.
Looming debt
Coyle argued that a college degree was needed for her career, but it was also the only way she felt she had a chance in the job market.
"We're being saddled with all this debt and the interest rates are so high and it just makes it impossible to move forward in life steps based on something we were told basically that we had to do," she said.
Right now, student loan payments are set to resume in late August, but could also come after the court decision on Biden's broad plan.
"This should absolutely not be a partisan issue," she added. "Just looking at Ohio alone, that small amount of debt relief would be such a benefit to so many people."
Having debt relief could also stimulate the economy, she said.
"I know a lot of people my age who are exactly in the same situation where they're scared to make those major purchases that we're told were supposed to make — buy a house, buy a car, things that would invest in the economy, because that student loan debt is staring over their shoulder," Coyle said.
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