As lawmakers and Biden’s administration debate student loan aid, borrowers continue to fight

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According to New Yorker Sabrina Calazance, her circumstances are a prime example of what is fueling the campaign to cancel some, if not all, of student loan debt. Since leaving Pennsylvania Arcadia College in 2019 with a $ 43,000 student loan debt and a BA in International Studies, Calazance has mostly worked in several summer camps and temporary jobs at $ 15 an hour.

Sabrina Calazance

“It’s not that I don’t want to pay this bill, but that I cannot afford it,” says Calazans, who became a part-time organizer in early April paying $ 20 an hour for the Crisis student debt “. organization.

“And my situation is not unique,” ​​she adds. “There are millions of people living in a place like this, including people who are ashamed to talk about it.”

Calazance shared a similar message with US Secretary of Education Dr. Miguel Cardona, NAACP President Derrick Johnson, and US Senators Chuck Schumer (New York State) and Elizabeth Warren (New Hampshire) during a recent online chat. Also in this private conversation were three other college graduates with debt who, like Calazance, are monitoring how the country’s lawmakers will decide whether, how much, and for whom, student loan debt will be paid off.

President Joe Biden’s administration has offered to write off the first $ 10,000 of each borrower’s debt. Warren and Schumer are calling on the administration to forgive up to $ 50,000.

These proposals came in connection with the extension by the White House, at least until September 2021, of the pre-existing emergency suspension of student loan payments caused by the coronavirus. They also come as observers from across the political and political spectrum to calculate the cost of debt relief.

Capacity issue

According to Terry Hartle, senior vice president of the American Board of Education, forgiving $ 10,000 to a borrower means writing off $ 350 billion in debt “immediately, in the first year of it.” “To put this in context, that’s about the amount of money it would take to double the Pell grant program over the next ten years. If money is limited, what would you rather do? “

It’s unclear, Hartle adds, whether the White House or Congress has the power to cancel the debt. For now, the Biden administration has said it has no constitutional authority to act on its own, even though left-wing politicians are encouraging Biden to act alone.

“This is a multifaceted and complex issue that policymakers and analysts have been wrestling with for years,” Hartle says, explaining that it could take Congress up to two years to pass the new rules.

He adds that the proposed debt relief proposals “will only help those who pay now, not those who graduate next year. This is a huge social problem with economic and political aspects. Many very nice people [have been] wrestled with how to fix it for years. “

Where to draw the line?

Hartl is among those asking what they say are some obvious, unanswered questions: If debt relief becomes a long-term endeavor, how does such a program support itself financially? Which borrowers legitimately need such assistance, even in the short term, as a one-time solution to a problem?

“Reducing debt and reducing the burden of student loan debt are two very different things,” says Dr. Sandy Baum, senior fellow at the Urban Institute’s Education Data and Policy Center. “A small proportion of borrowers account for a very large share of the debt. Most of them studied in graduate school, most of them have a bachelor’s degree. “

She added that almost all graduates are working or will be employed in well-paid jobs. “These are not overwhelming difficulties.”

Dr. Sandy Baum

In the real hard times, Baum said, people drop out of college because they still owe thousands, but work for low wages or no jobs at all. “This is a third of borrowers. They were not at school for long. They may have been kicked out of school because they did not check their income annually. … If you borrowed $ 10,000 and you cannot make the payment, it doesn’t take you 20 years to be forgiven. It shouldn’t be hanging over your head. “

Neither the leaders of Congress nor the White House told the public that they were delving into such details.

Baum says of the Biden administration: “We don’t know what they’re going to do. Obviously they are under great pressure to [cancel] a certain amount of debt. But there is reasonable resistance to debt cancellation from everyone. “We don’t want the White House to hand out hundreds of billions of dollars alone,” she says.

This resistance includes legislators from both mainstream parties and, according to some polls, more than half of the American public.

Still, help is being felt sharply, according to student debt crisis executive director Natalie Abrams.

Even with a debt repayment moratorium, nine million of the country’s approximately 43 million borrowers received deferred payments because they received loans under protocols other than the current lending rules.

“We are talking with borrowers with old types of loans who are not eligible for assistance due to COVID. We hear from Americans with disabilities, ”says Abrams. “There are so many people who don’t feel like they have a voice in this movement. We support widespread and ongoing assistance. “

“One of the biggest misconceptions about this,” adds Cody Hunanyan, director of student debt crisis programs, “sees it as a hostile affair when there are people who want debt cancellation and people without debt who oppose it. … However, in a broader sense, the American public understands that this debt is a burden on the economy, their friends and neighbors. The majority understands that this is a crisis. “

The way forward

The #CancelStudentDebt Campaign as part of the #CancelStudentDebt Campaign for the Student Debt Crisis is calling for a far-reaching initiative that includes broad debt cancellation, but free college for all applicants and a cost check college education.

For decades, these costs have outpaced overall inflation. Data from the Federal Department of Education’s National Center for Education Statistics show that between 1985-86 and 2017-18, the average cost of admission to a four-year college or university doubled the rate of inflation, and the cost of a two-year college rose a third faster than inflation. …

Indeed, observers argue, more attention could be focused on this, especially at a time when declining government revenues have triggered a series of cuts in public colleges and universities.

Meanwhile, according to Hartle and Baum, there are some practical, perhaps more out-of-the-box solutions to longstanding problems in the student loan program. One option is to create a single, standardized repayment option that replaces what is now seven separate, sometimes confusing, repayment options. Due to the confusion in the current system, financially distressed borrowers may be left to the mercy of lenders. A second option is to consider basing repayment amounts and schedules on income rather than loan amounts, as some other countries do.

When the repayment moratorium ends this fall, Calazance will resume paying $ 465 per month, which she is paying against $ 29,000 of the $ 43,000 covered by the emergency suspension. Throughout the pandemic, she continued to pay the $ 160 a month needed for the rest of her combination of private and federal loans.

Her parents, with whom she lives, helped her with the payment of money. Calazance hopes that someday, after her salary prospects improve, she will be able to manage her debt on her own.

“I was thinking about getting a job with one [non-governmental organization] it was out of state. But the wages were too low to cover loans and pay rent. … And the $ 43,000 I owe is more than my parents earn in a year, ”says Kalzans, whose mother is a domestic servant and her father is a factory worker.

“The problem of student loan debt is linked to a multitude of factors that disproportionately affect some communities and not others,” she says. “I live in this reality and see it among other borrowers.”

This article first appeared in the May 27, 2021 issue of Diverse. Read this here