Pete Buttigieg says private colleges have 'almost turned Department of Education into a predatory lender'

'Many of these colleges have really harmed people,' Mr Buttigieg says, describing a student loan crisis in America he says has hit his family, too

(EPA)

Pete Buttigieg has vowed to take on fraud in the US student loan system, and to hold private for-profit colleges accountable if they waste student money and provide sub-par education.

Speaking to students and residents in Queens, New York, the mayor of South Bend detailed steps in his plan for America’s student loan crisis.

That plan stops short of giveaways, he told the crowd at Laguardia Community College on Wednesday. But, he said, a forgiveness plan would make sense for students who get duped by colleges on the prowl for potentially vulnerable young people looking for an affordable education in a country where student loans have reached record-setting levels.

“Many of these colleges have really harmed people,” Mr Buttigieg said, recalling that he was among those targeted after he returned from serving in Afghanistan by schools that knew they could offer him veteran discounts.

“They’ve almost turned the Department of Education into a predatory lender,” he said.

Mr Buttigieg’s plan to take on student loans comes at a time when US student debt comes to a whopping $1.47 trillion — and the issue is particularly keen for students who attend for-profit colleges, where student loan defaults are nearly double that for public schools.

His comments come just days after billionaire Robert Smith announced he would be paying off an entire graduating class’s student loans — a $40m gift that received praise, but sparked a considerable renewed outrage that America’s education system has come to the point where a billionaire would even need to pay off a class’s debt load.

“Very nice of him,” Mr Buttigieg said to laughter when asked about Mr Smith’s announcement on Sunday. “But, you know, try to do that with four million. Right?”

Mr Buttigieg’s student loan plan notably stops short of providing free college and tuition, unlike some candidates like Elizabeth Warren or Bernie Sanders, who have made big promises on that front — and who are both leading Mr Buttigieg in national polls at the moment.

Instead, Mr Buttigieg says he wants to expand Pell Grants that help low and middle income Americans afford college, and to tie it to inflation to keep Congress out of the issue going forward. He says he wants to see a state-federal partnership, so that students are burdening less of the costs, and so that more Americans can afford to pay for a degree that is one of the best ways to earn a higher wage available to workers.

But he has also said he wants to expand access to the Public Service Loan Forgiveness programme, an expansion that he says could help get more people giving back to their communities.

Jemma Lasswell, an 18-year-old high school student at his event in Queens, quickly named public service as a reason she came to see Mr Buttigieg on Wednesday. She said that 2020 will be her first opportunity to vote, and that she has already made the first political donation of her life — to the 37-year-old mayor.

“Especially when he talks about national service, I just turned 18 and he served in the military and he talks about encouraging more people to involve themselves in community service, especially 18 year olds,” she said when asked why she likes about Mr Buttigieg. “I’m really interested in seeing how he would establish a more social norm for people to serve.”

Mr Buttigieg, who is a Rhodes Scholar who studied at Oxford and Harvard, said the issue of student loans is personal for him, too.

While he avoided loans by getting a scholarship, he said his husband, Chasten Buttigieg, had to take out some heavy loans to get his Master’s.

“It’s something we’re hearing everywhere we go,” Mr Buttigieg said “This is kind of personal for us, too, because as a household we’re now six figures on student debt. I had the benefit of a scholarship to cover my graduate school, but Chasten didn’t because he made the decision to be a teacher, where [with his] master’s [he makes] as much or a little bit less than he did as a bartender when he was putting himself through school.”

“It’s a real struggle,” he said.