Howard University is wiping out student debt for juniors and seniors, joining the growing number of HBCUs using Biden' stimulus for relief

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  • Howard University announced it's clearing student debt for upperclassmen facing financial hardships.

  • It's the latest HBCU to use Biden's stimulus funds to erase debt students owe to the school.

  • At the same time, lawmakers are urging Biden to act on federal student debt and cancel it broadly.

  • See more stories on Insider's business page.

Some juniors and seniors at Howard University just got a major back-to-school gift.

The university announced on Friday it would join the growing ranks of schools that are using funds from President Joe Biden's stimulus plan to erase debt students owe the institution. Since the Education Department announced in March that colleges could do so, Historically Black Colleges and Universities (HBCUs), in particular, have led the charge to give their students financial relief.

The DC HBCU will clear institutional debts for juniors and seniors facing financial hardships as a result of COVID-19. Howard University President Wayne A.I. Frederick said in a statement that for students who have an expected family contribution of $0 and an outstanding balance for the spring 2021 semester, the university will eliminate all of their current debt.

"We take our responsibility to our community, and to all those who place their trust in us for their education or employment, very seriously," Frederick said. "Howard will always devote as much of our resources as we can to minimize the challenges our staff and students encounter."

The university did not immediately respond to Insider's request for comment on how much this relief will total, but according to the press release, the school has so far distributed $27 million in direct cash payments, waived fees, and other services since the pandemic started.

Institutional student debt, or debt owed to schools by students, is different than the federal student debt that makes up the $1.7 trillion student debt crisis and if often collected by loan companies that profit from debt collection. As Insider previously reported, though, this type of debt that schools like Howard are erasing still can pose significant barriers to education, such as the holding of transcripts and preventing enrollment in classes until that debt is paid off.

So far, over 20 HBCUs have used federal funds to wipe out institutional debt for their students, while at the same time, federal student debt continues to grow. While Biden has canceled about $9.5 billion in student debt for certain groups of borrowers since he took office, many Democrats and advocates want him to go further and cancel $50,000 in federal student debt for every borrower.

"The president has the power to cancel $50,000 in student loan debt right now," Massachusetts Sen. Elizabeth Warren previously told Insider. "Senator Schumer and I are going to continue to push for this, but Biden doesn't need any authorization from Congress. He needs to pick up the pen and do it himself."

Read the original article on Business Insider