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      ‘Who should pay?’: student debt relief in limbo as supreme court decides fate of millions

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      ‘Who should pay?’: student debt relief in limbo as supreme court decides fate of millions Over 26m student loan borrowers are waiting for the country’s highest court to decide if they can receive debt reliefDebt-laden borrowers will be nervously watching the US supreme court come February when the justices hear arguments for two cases that will ultimately decide the fate of over 26 million student loan borrowers who have applied for loan forgiveness.US student debt relief: borrowers in limbo as lawsuits halt cancellation programRead moreThough the future of student loan forgiveness is uncertain in the hands of a deeply conservative court, two researchers who have studied public opinion on student debt and college accessibility see room for optimism, even amid uncertainty around the issue.The millions of Americans who applied were set to get at least $10,000 (£8,320) in relief for their loans under a plan that Joe Biden released over the summer. But the plan’s rollout was halted in November by a Trump-appointed federal judge in Texas, putting the possibility of forgiveness into question.“[Student loan forgiveness] is something that five years or 10 years ago, we wouldn’t have seen. It shows that there’s movement for politicians and the public to do something about student debt that has meaningful effects for a lot of people,” said Natasha Quadlin, a professor at University of California, Los Angeles who co-wrote a book this year, Who Should Pay?: Higher Education, Responsibility and the Public that documents the change in public opinion on how much the government should pay for higher education.Quadlin, along with her co-author Brian Powell, a professor at Indiana University, started administering surveys in 2010 asking people who should pay for college: parents, students or the government.In 2010, nearly 70% of respondents believed that only parents and students should be funding higher education. In 2019, the number dropped to 39%. Meanwhile, the percentage of people who believe the government, both federal and state, should primarily fund college rose from 9% in 2010 to 25% in 2019. All other respondents indicated that the government should help parents or students pay for college.When Quadlin and Powell set off to do this decades-long research in 2010, they did not realize how dramatically people’s perspectives on who should pay for college would change.“When we started working on the book and collecting data, the idea of loan forgiveness was not even really part of the American consciousness,” Powell said.The researchers note a few factors that went into this rapid shift. First, student debt nearly doubled in size between 2010 and 2015, reaching $1.3tn (£1tn) by the end of 2015. The cost of college was also rising, especially since states were slashing higher education budgets during the Great Recession.Fight against inflation raises spectre of global recessionRead more“It became apparent that the current generation that was going through higher education just wasn’t getting a very good deal in terms of the returns they were seeing,” Quadlin said.Some respondents also noted that the Affordable Care Act, passed in 2010, showed them that government can offer broad support for certain areas of life.“Several people said: ‘If we can do this for something as important as healthcare, and ensure health insurance, then we should be able to do that for education as well,’” Powell said.Sentiment had changed so much that some states were discussing the possibility of free college, a policy that Quadlin and Powell did not even consider putting on their survey in 2010. By 2019, over 20 states offered programs that either reduced or eliminated the cost of public college. Nearly 40% of respondents on the survey strongly and 32% somewhat agreed that public college should be free for those who are qualified to attend.Loan forgiveness and free college, while similarly addressing accessibility to higher education, are ultimately two different issues. While the researchers note that both should be pursued simultaneously, it appears that much of the current focus is on addressing debt forgiveness as the immediate problem.How quickly either will be addressed is unclear, but “the costs and burden [of student debt] is so high and so widespread”, Quadlin said.“There is a recognition that college is necessary for such a large percentage of the problem … and [its] not getting fixed,” she said.Throughout the book, Quadlin and Powell note how quickly public opinion had changed on same-sex marriage in a short amount of time. Powell, who has studied this change in opinion, noted that Congress just recently passed a bill protecting same-sex marriage with bipartisan support. In 2010, Gallup reported 28% of Republican support same-sex marriage. In 2021, the percentage rose to 55%.While Republicans have largely been against Biden’s student loan forgiveness plan, there is some evidence that there could be Republican support one day. In 2014, Tennessee, under a Republican governor, created a scholarship program for free community college – an initiative that is still thought to be too radical at the federal level.“We’ve had examples of bipartisan support. Education is one of those areas that people believe in – the American Dream, that people can be able to have the education they need to have a fulfilling life and successful career,” Powell said. “It’s hard to envision the changes in the past year without the dramatic change in public opinion that occurred in a really short period of time.”TopicsUS student debtHigher educationUS politicsRepublicansDemocratsBiden administrationDebt relieffeaturesReuse this content More

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      Rightwingers threaten legal action on Biden’s student loan debt relief

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      Rightwingers threaten legal action on Biden’s student loan debt reliefRepublicans seek to challenge loan forgiveness in the courts and are making it a key talking point in the midterm elections Even before Joe Biden announced his recent plan to forgive up to $20,000 in student loans for Americans burdened by their unprecedented debt from higher education, the US president was threatened with legal action by his adversaries on the right.Since the plan was put forward, chatter about a legal threat has grown even louder as Republicans have said they will seek to formulate opposition in the courts. But what remains unclear is how big of a threat those legal challenges actually pose.Student loan forgiveness: what you need to know about Biden’s planRead moreMeanwhile, supporters of debt forgiveness are also working on challenging the political threat to the plan as Republicans have also sought to make the program a key talking point during the upcoming midterm elections.The plan, which includes the forgiveness of federal student loans of up to $20,000 for Pell grant recipients and up to $10,000 for all others, with some exceptions, will provide a substantial amount of relief for the millions of Americans encumbered with student loan debt.Those ineligible for student debt cancellation include individuals who make over the income limit of $125,000 annually, for example.One of the plan’s staunchest opponents is rightwing Texas senator Ted Cruz. He laid out plans for pursuing legal action against the Biden administration in an interview on a rightwing podcast.Cruz explained that he and others would have to actively seek out someone that makes over the income limit – and is thus ineligible for any student debt forgiveness – who would be willing to be the plaintiff in a lawsuit, illustrating how they were “harmed” by Biden’s executive action.Cruz conceded that courts won’t accept just any plaintiff – for example, any taxpayer outraged by Biden’s student loan forgiveness plan. “Well, that may prove a real challenge. The difficulty here is finding a plaintiff whom the courts will conclude has standing to challenge this,” he said.Loan service providers stand to lose from Biden’s plan, but whether or not companies will legally challenge the cancellation and also claim to be “harmed” remains to be seen. Since Biden’s announcement, it was reported that the websites of nearly every major loan servicer crashed or experienced severe traffic-related problems as borrowers scrambled to check the latest status of their loans or get more information.Jim Hawkins, a law professor at the University of Houston and an expert in lending law, said Cruz is right to worry about the amount of work it will take to sue the Biden administration for student debt cancellation.He said: “One problem is identifying a plaintiff who has standing to sue. Who got hurt from loan forgiveness? I think the Republicans will have to work to find someone who was injured in order to sue them.”But while it’s unlikely that Republicans will find a plaintiff who has standing, Hawkins said it’s not impossible.“There’s uncertainty until a court makes a decision interpreting a law or applying the law to the facts of the specific case,” Hawkins said. “So for a lot of people, it’s going to be up in the air until we have decisions from courts.”Another uncertainty is how far some are willing to go to question the constitutionality of Biden’s use of executive authority to cancel the debt. Biden invoked the 2003 Heroes Act in order to cancel student loan debt, which gave the secretary of education authority to make changes to any provision of the law applicable to student aid programs in the aftermath of the September 11 attacks.Hawkins said the Heroes Act “has broad language, giving the president power. But it might be a bit of a stretch to think that the act written in response to 9/11 applies to Covid. It applies to anyone affected by an emergency. The question is, how much authority does that give Biden?”Hawkins said there is a chance a court could say the act is more narrow than Biden thinks. Cruz and others argue student debt cancellation is an overreach of power, despite Trump invoking the same act to pause student loan payments at the start of the pandemic.Biden’s secretary of education, Miguel Cardona, sought to clear up confusion by publicly releasing a legal opinion from the Department of Justice that states the Covid-19 pandemic qualifies as a national emergency.One speculative lawsuit has already been launched by an Oregon homeowner who once ran for the US Senate as a Republican. Daniel Laschober is arguing both that Biden overstepped his authority and that as a homeowner he will suffer damages because the program could stoke inflation and raise interest rates on his mortgage.But the rightwing pushback over student loan forgiveness is also a political fight in the court of public opinion, and one where supporters of the program are also gearing up to have their say, especially when it comes to false narratives pushed by the right that the program will largely benefit an elite class of people.That is certainly the tone of the Republican response so far. Ron DeSantis, the far-right governor of Florida, argued that Biden’s student debt cancellation plan benefits members of high society. He said: “It’s very unfair to have a truck driver have to pay back a loan for somebody that got like a PhD in gender studies. That’s not fair. That’s not right.”DeSantis joined 21 other Republican governors across the country to publish a joint letter condemning Biden’s plan to forgive student debt. “We fundamentally oppose your plan to force American taxpayers to pay off the student loan debt of an elite few,” the letter read. Astra Taylor, a film-maker and activist who founded Debt Collective, a union of debtors, said that those condemning people with student loans fail to take into consideration that these borrowers are in reality anything but the elite. They are usually working-class Americans, many of whom went into debt for trade school or community college rather than for a top university degree.“I’m just not sure that they’re playing to the base the way they think they are,” Taylor said. “Obviously, [Republicans] are very invested in a kind of anti-intellectual, anti-academy politics. But people go to trade school and get student debt. People go to cosmetology school and get student debt.”Taylor is right. Ten per cent of those with student debt received a professional certificate from institutions like trade schools, according to Upjohn Institute labor economist Aaron Sojourner.In an interview with Axios, Sojourner said: “Many Americans understandably, but mistakenly, assume that the vast majority of student loan debtors have four-year degrees, when in fact about half do not.”And on the whole, 90% of relief dollars will go to people making less than $75,000 annually, according to the Department of Education.So far, polling shows Republicans may not have found the winning issue some of them might think they have. Surveys on the plan usually show majority support for it and two recent polls – by Quinnipiac and the Economist/YouGov – have registered voters backing it by 51% and 52%, respectively. That support rises among Latino and Black voters and those aged under 50.While Taylor, like many others across the country, believes the student debt forgiveness plan doesn’t go nearly far enough, she said she understands its significance and that it is worth fighting hard for.“My position is very clear in that I think all student debt should be lost and we should return and expand the model of higher education that was the standard in this country a few generations ago,” she said. “But on paper, it’s enormous. It’s an incredibly significant political victory for progressives.”She added: “We’ve had all sorts of debt relief over the last decade plus, for more affluent people and corporations, so I think this is really significant in terms of showing that for working class and middle class people, debt can also be canceled. It’s just the beginning of a real reckoning with the scale and scope of the student debt crisis.”TopicsUS student debtUS politicsJoe BidenRepublicansUS student financefeaturesReuse this content More

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      Biden says his student loan relief is ‘life-changing’. Will it fix the system’s inequities?

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      Biden says his student loan relief is ‘life-changing’. Will it fix the system’s inequities?The initiative’s income cap and unclear bureaucratic process could fail to address the racial disparities that already exist01:15As Joe Biden announced the details of his plan to help those with student loan debt, Kat Welbeck wrestled with the idea. For millions of Americans, the unprecedented relief would be “life-changing”, especially for low-income and Black and Latino Americans, who are disproportionately saddled with decades-long debt, she said.But the plans’ income cap on who can receive cancellation, and its unclear bureaucratic process for Americans seeking debt relief could perpetuate the inequities that underpin the nation’s student loan system, Welbeck, director of advocacy and civil rights counsel for the Student Borrower Protection Center, said.Student loan forgiveness: what you need to know about Biden’s planRead more“While a $10,000 cancellation is so meaningful for millions of student loan borrowers, there’s a lot that’s still to be done to fix this student debt crisis,” Welbeck says.On Wednesday, the White House released its long-anticipated plan on how to tackle the nation’s mounting $1.6tn student loan debt, accounting for more than 43 million people, with almost a third owing less than $10,000, according to federal data.The initiative would cancel up to $10,000 in debt for borrowers who earn less than $125,000 a year ($250,000 for married couples). Borrowers whose low income level qualified them for a Pell Grant will receive up to $20,000 in relief. The White House also extended a pause for “one final time” on student loan payments through January.The White House has projected that the plan would eliminate full debt balances for 20 million Americans and that 90% of debt relief dollars would go toward people with incomes less than $75,000. The White House also touted it as an effort to “advance racial equity”, pointing to its targeted relief for those who received Pell Grants. Officials noted that Black Americans were twice as likely to receive such grants as white Americans.Senator Elizabeth Warren, who, like others, have advocated for cancelling at least $50,000 in student debt, praised the administration’s plan as “transformative for the lives of working people all across the country” and would “help narrow the racial wealth gap among borrowers”.Still, some argue that the cancellation of just $10,000 for most borrowers would fail to substantially affect the racial disparities within the student loan system. Black and Latino borrowers disproportionately come from poorer households and, as a result, take on more debt than white Americans. At the same time, white American households have, on average, 10 times the wealth of Black households.Derrick Johnson, president of the NAACP, which had been advocating for cancellation of $50,000, wrote in an op-ed that Biden’s plan would “do little to help” Black Americans who, on average, hold nearly twice as much student debt as white borrowers. “Canceling just $10,000 of debt is like pouring a bucket of ice water on a forest fire,” he said. Canceling $10,000 in student debt when the average white borrower is $12,000 in debt, while Black women hold on average over $52,000 isn’t just unacceptable, it’s structural racism.— Nina Turner (@ninaturner) August 23, 2022
      The emphasis on income in the White House’s cap represents a possible barrier that could exclude borrowers of color who meet the income threshold yet their families lack the wealth to tackle the debt, Welbeck says. A June 2020 report from the Student Borrower Protection Center found that 90% of Black Americans and 72% of Latino Americans took out student loans, a far cry from the 66% of white Americans.And 20 years after graduating college, the median Black borrower still owed 95% of their original debt while the median white borrower paid down the same amount. For Latinos, after 12 years, they owed 83% of their original debt, more than the white borrower over the same time.Given that Black and Latino Americans typically earn less than white Americans, borrowers of color will start from behind without the intergenerational wealth available to reduce the debt they already hold.“So if you’re already coming from a lower-wealth household, you now have more debt, and then that cuts into opportunities for you to build wealth for the next generation,” Welback says. “You might see higher-income households that are Black or Latino, but that does not take away the fact that you still have those wealth disparities.”Student loan forgiveness: what does it mean for the US debt crisis?Read moreHistorically, the education department has complicated access to loan forgiveness through the programs it creates, such as the Public Service Loan Forgiveness program for non-profit and public service workers seeking relief and the borrower defense program for those who were defrauded by predatory for-profit colleges.The White House initiative does nothing to address private student loan debt, which accounts for more than $140bn in debt. Although Latino borrowers were more than twice as likely to report struggling with private student loan debt as white borrowers, Black borrowers were a staggering four times as likely to fall behind on private debt payments, according to the Student Borrower Protection Center.An application process could make it harder for people to access relief, Welbeck says. But recent decisions by the education department to automatically discharge debts for hundreds of thousands of students who attended ITT Technical Institute and Corinthian Colleges, two for-profit college chains that imploded, show that a widespread relief without bureaucratic hurdles is possible. The two debt cancellations at the for-profit institutions amounted to roughly $10bn affecting more than 700,000 students.“The student debt crisis is a result of the longstanding history of racial discrimination that we have in our country, and it continues to perpetuate them,” Welback says. “So until we address student debt as a civil rights crisis, we’re not going to be able to make meaningful gains toward equity.”TopicsUS student debtBiden administrationUS student financeRaceJoe BidenUS politicsUS educationnewsReuse this content More

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      Student loan forgiveness: what you need to know about Biden’s plan

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      ExplainerStudent loan forgiveness: what you need to know about Biden’s planWho qualifies and how to apply for the forgiveness plan, and will the student loan payment freeze be extended? President Joe Biden said Wednesday that many Americans can have up to $10,000 in federal student loan debt forgiven. That amount increases to $20,000 if they qualified for Pell grants. Here’s what we know so far and what it means for people with outstanding student loans:Who qualifies for student loan forgiveness? You qualify to have up to $10,000 forgiven if your loan is held by the Department of Education and you make less than $125,000 individually or $250,000 for a family. If you received Pell grants, which are reserved for undergraduates with the most significant financial need, you can have up to $20,000 forgiven. If you are a current borrower and a dependent student, you will be eligible for relief based on your parents’ income, rather than your own.Will the student loan payment freeze be extended?The payment freeze will be extended one last time, until 31 December. The freeze started in 2020 as a way to help people struggling financially during the Covid-19 pandemic and it’s been extended several times since. It was set to expire on 31 August.Interest rates will remain at 0% until repayments start. Under an earlier extension announced in April, people who were behind on payments before the pandemic will automatically be put in good standing.How do I apply for student loan forgiveness?Details of that have not been announced, but keep an eye on the federal student aid website for more details in coming days.What’s a Pell grant and how do I know if I have one?Roughly 27 million borrowers who qualified for Pell grants will be eligible to receive up to $20,000 in forgiveness under the Biden plan.Pell grants are special government scholarships for lower-income Americans, who currently can receive up to $6,895 annually for roughly six years.Pell grants themselves don’t generally have to be paid back, but recipients typically take out additional student loans.“This additional relief for Pell borrowers is also an important piece of racial equity in cancellation,” said Kat Welbeck, Civil Rights Counsel for the Student Borrower Protection Center. “Because student debt exacerbates existing inequities, the racial wealth gap means that students of color, especially those that are Black and Latino, are more likely to come from low-wealth households, have student debt, and borrow in higher quantities.”To find out if you have a Pell grant, check any emails you’ve received that describe your FAFSA award.How many people will this help? About 43 million Americans have federal student debt, with an average balance of $37,667, according to federal data. A third of those owe less than $10,000. Half owe less than $20,000. The total amount of federal student debt is more than $1.6tn.What if I’ve already paid off my student loans – will I see relief? The debt forgiveness is expected to apply only to those currently holding student debt. But if you’ve voluntarily made payments since March 2020, when payments were paused, you can request a refund for those payments, according to the Federal Office of Student Aid. Contact your loan servicer to request a refund.Will student loan forgiveness definitely happen?The White House is expected to face lawsuits over the plan, because Congress has never given the president the explicit authority to cancel debt. We don’t know yet how that might impact the timetable for student loan forgiveness.What repayment plan is the Department of Education proposing? The Department of Education has proposed a repayment plan that would cap monthly payments at no more than 5% of a borrower’s discretionary income, down from 10% now. Borrowers will need to apply for the repayment plan if it’s approved, which could take a year or more.For example, under the proposal, a single borrower making $38,000 a year would pay $31 a month, according a government press release.The amount considered non-discretionary will also be increased, through the department has not said how much.Discretionary income usually refers to what you have left after covering necessities like food and rent, but for student loan repayment purposes it’s calculated using a formula that takes into account the difference between a borrower’s annual income and the federal poverty line, along with family size and geographic location.What if I can’t afford to pay even with loan forgiveness? Once payments resume, borrowers who can’t pay risk delinquency and eventually default. That can hurt your credit rating and mean you’re not eligible for additional aid.If you’re struggling to pay, check if you qualify for an income-driven repayment plan. You can find out more here.The plan Biden announced on Wednesday also includes a proposal that would allow people with undergraduate loans to cap repayment at 5% of their monthly income. Proposals like this one can take a year or more to be implemented, and it’s not clear what the fine print will be.If you have worked for a government agency or a non-profit organization, you could also be eligible for the Public Service Loan Forgiveness Program, which you can read more about here.TopicsUS student debtUS personal financeUS student financeUS politicsUS income inequalityexplainersReuse this content More

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      Biden isn’t serious about forgiving student debt. ‘Means-testing’ is a con | David Sirota

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      Biden isn’t serious about forgiving student debt. ‘Means-testing’ is a conDavid Sirota and Andrew PerezThe Biden administration’s proposal is cynicism masquerading as populism – and it will enrage everyone and hurt the Democrats’ electoral chances During the 2020 Democratic primary, Pete Buttigieg’s personal ambition led him to poison the conversation about education in America. Desperate for a contrast point with his rivals, the son of a private university professor aired ads blasting the idea of tuition-free college because he said it would make higher education “free even for the kids of millionaires.”The attack line, borrowed from former secretary of state Hillary Clinton, was cynicism masquerading as populism. It was an attempt to limit the financial and political benefits of a proposal to make college free. Worse, it was disguised as a brave stand against the oligarchs bankrolling Buttigieg’s campaign, even though it actually wasn’t – almost no rich scions would benefit from free college.Buttigieg and copycats like Amy Klobuchar were pushing a larger lie. Call it the means-testing con – the idea that social programs should not be universal, and should instead only be available to those who fall below a certain income level. It is a concept eroding national unity and being carried forward by wealthy pundits and a Democratic party that has discarded the lessons of its own universalist triumphs like social security, Medicare and the GI Bill.This week the Biden administration tore a page from Buttigieg’s book. The White House leaked that it is considering finally following through on Joe Biden’s promise to cancel some student debt – but not the $50,000 pushed by congressional Democrats, and only for those below an income threshold.In trial-ballooning the college debt relief proposal, the president is boosting the media-manufactured fiction that real, universal college debt relief would mostly help rich Ivy League kids – even though data from the Roosevelt Institute conclusively proves that canceling student debt “would provide more benefits to those with fewer economic resources and could play a critical role in addressing the racial wealth gap and building the Black middle class”.As the report points out: “People from wealthy backgrounds (and their parents) rarely use student loans to pay for college.”But setting aside how the media-driven discourse omits those inconvenient facts, what’s noteworthy here is the underlying principle.This latest discussion of means-testing follows Biden and congressional Democrats pushing to substantially limit eligibility for Covid-19 survival checks and the expanded child tax credit. Taken together, it suggests that Democrats’ zeal for means-testing is no anomaly – it is a deeply held ideology that is both dangerous for the party’s electoral prospects and for the country’s fraying social contract.The superficial appeal of means-testing is obvious: it promises to prevent giving even more public money to rich people who don’t need it.But in practice, means-testing is a way to take simple universal programs and make them complicated and inaccessible. Calculating exact income levels and then proving them for eligibility means reams of red tape for both the potential beneficiary and a government bureaucracy that must be created to process that paperwork.Data from the food stamp and Medicaid programs illustrate how means-testing creates brutal time and administrative barriers to benefits, which reduce payouts to eligible populations. In the case of means-testing student debt relief, those barriers may end up wholly excluding large swaths of working-class debtors.This is a feature, not a bug – it is means-testers’ unstated objective. They want to limit benefits for the working class, but not admit that’s their goal.Universal programs like social security and Medicare were what we once defined as “society” or “civilization”. They may be derided as “entitlements”, but the reason they have (so far) survived for so long is because their universality makes them wildly successful in their missions and more difficult to demonize. Their universality also precludes austerians from otherizing and disparaging the programs’ recipients.Means-testing destroys that potential unity. It may initially poll well, but it turns “entitlements” into complicated “welfare” programs only for certain groups, which then makes those programs less popular and makes the beneficiaries easy scapegoats for political opportunists. Think of Ronald Reagan’s “welfare queen” trope vilifying recipients of means-tested food stamps.Now sure, billionaires are eligible for social security and Medicare, and their kids are eligible for free K-12 education – and that aristocracy doesn’t need that help. But when those programs were created, we accepted that rich people being granted access to those programs along with everyone else was the relatively small price to pay for simplicity, universalism and the attendant national unity that comes with it.Not surprisingly, Democrats’ creation of popular universalist programs coincided with the most electorally successful era in the party’s history.Equally unsurprising: the shift to fake means-test populism has coincided with rising popular hatred of liberal technocrats and the Democratic party they control.What is surprising is that Republicans may be starting to understand all this better than Democrats.For instance, Donald Trump’s signature spending legislation offered direct, non-means-tested aid to small businesses during the pandemic. The former president touted a plan to just pay hospital bills for Covid patients who didn’t have coverage. The programs were hardly perfect, but they were straightforward, universal, relatively successful and extremely popular because they embodied a powerful principle: keep it simple, stupid.When it comes to student debt relief, there’s a rare chance for Democrats to also embrace simplicity – and prevent Republicans from outflanking them.More specifically, they can use the student debt crisis to finally return to their universalist roots – and they don’t have to skimp and provide merely $10,000 worth of relief.Biden could simply send out a one-page letter to every student borrower telling them that their federal student debt is now $0.Yes, Republican lawmakers would try to block it and affluent pundits would tweet-cry about it to each other.But amid all that elite whining and couch-fainting, Democrats would be launching a battle against an immoral system of education debt – and directly helping 40 million voters ahead of a midterm election.It’s so easy and simple – which is probably why they won’t do it.
      David Sirota is a Guardian US columnist and an award-winning investigative journalist. He is an editor-at-large at Jacobin, and the founder of the Lever. He served as Bernie Sanders’ presidential campaign speechwriter
      Andrew Perez is a senior editor at The Lever and a co-founder of the Democratic Policy Center
      A version of this piece was first published in the Lever, a reader-supported investigative news outlet
      TopicsUS student debtOpinionUS politicsBiden administrationJoe BidenDemocratsUS CongressUS student financecommentReuse this content More

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      ‘Killing the middle class’: millions in US brace for student loan payments after Covid pause

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      ‘Killing the middle class’: millions in US brace for student loan payments after Covid pauseStudent debt in America has become a crisis for millions of citizens that often feels like it will last for people’s whole lives Jennifer Rae Wilson, a social worker and single mother of three children in Richland, Washington, has struggled with student loan debt since she went back to school and graduated in 2000 – more than two decades ago.Struggling to raise three boys with very little child support, Wilson decided to attend college 10 years after graduating high school to improve her career prospects. She was eventually able to move out of low-income assistance housing and off government assistance programs.“But then the school loans hit,” said Wilson. “I couldn’t afford the payments on top of rent and all of the other things, there was no way that I could make those payments.”She is not alone, as student debt in America has become a crisis for millions of citizens that often feels like it will last for people’s whole lives, or at least blight them for many years to come after graduation. Around 44.7 million Americans have outstanding student loan debt totaling over $1.86tn, with 42.3 million Americans holding federal student loan debt.The US Department of Education paused repayment, collections and interest on federal student loans in response to the Covid-19 pandemic under Trump, with the final extension on the pause set to expire on 31 January 2022.But now millions of Americans are bracing for resuming payments on federal student loans after nearly two years of relief – and the crisis is set to roll on again.Between rent, bills and daycare costs, Wilson went into default after not being able to keep up with student loan payments. Then her paychecks started being garnished in 2010 to pay off the student loans of around $1,000 per month, which was just paying off the interest on her principal.The pause on student loan repayments during the pandemic allowed Wilson to catch up on other bills and purchase a home, but she worries about the payments restarting.“It kind of concerns me a little bit with it coming back with what they’re going to be able to offer us in terms of payment plans,” added Wilson. “I’ve been making payments for 20 years and my balance has only gone up. That doesn’t make any sense. If I made a $1,000 per month payment on my car, or on my house, I would be paid off and I would not have a home loan or would not have a car loan. But with this, it doesn’t seem to make a difference.”A recent survey of more than 33,000 student loan borrowers conducted by the Student Debt Crisis Center found 89% of borrowers are not financially secure enough to resume payments on 1 February. Prior to the pandemic, over half of all student loan borrowers were either in default, forbearance, deferment, or otherwise not currently making payments on their student debt.PJ Rivera of Texas is one of the borrowers not prepared to resume student loan payments. His initial student debt was around $80,000, but has increased with interest to $110,000, despite making payments of $1,000 a month.“Student loans have crippled my ability to have personal savings but the inability to help my family who are struggling with hospital bills and other medical bills,” said Rivera. “The system doesn’t work. It’s not the students’ fault because you need money to pay for your career. Maybe tuition shouldn’t be so high to start with. Everyone should be able to study and learn about whatever they are passionate about without going broke or living to pay and nothing else.”The average student loan debt for new college graduates is around $30,000. Joe Biden campaigned on cancelling $10,000 in student loan debt per person and cancelling student debt for Americans who attended Historically Black Colleges and Universities and public colleges, but the Biden Administration has yet to cancel debt for these AmericansBeverly Dunker Brown of New York City completed her undergraduate and graduate degrees in the 1980s and 90’s, but with high interest rates and taking on parent plus loans for her son, her student loan debt has increased from around $43,000 in loans to over $150,000.“I will be in my late 80s paying student loans off of social security income,” said Dunker Brown. “I have Federal Family Education Loan Program loans which were not paused. I can’t afford to pay them and continue to request forbearances on them.”Despite making a six-figure salary in business administration, she is unable to properly save for retirement, save for home, and cares for her disabled husband who is a cancer survivor and regularly requires dialysis. Her own student loans are $862 monthly and the parent plus loans for her son will add another $362 a month when the federal student loan pause ends.“The interest and penalties are just crazy. My student loan balance increases each month. Black and Brown people can’t get ahead,” added Dunker Brown. “I have no generational wealth, retirement savings or savings for an emergency, yet I have an MBA that I earned in 1996. Having a fancy degree wasn’t the answer it was supposed to be.”Black college graduates owe an average of $7,400 more in student loans than white college graduates, and that gap more than triples to nearly $25,000 after four years from graduation.Sabrina Elliott of Charlotte, North Carolina, couldn’t afford to make payments toward her student loans for the first eight years after graduating law school. By the time she could afford to start making payments, with the debt ballooned from over $72,000 to more than $166,000.For the past seven years, Elliott has made monthly minimum payments of nearly $1,400 a month, but still owes more than the original loans despite paying over $90,000 toward the debt in that time.“Student loans should not impair a person from being a homeowner, starting a family or a badge of shame,” said Elliott. “I have made payment for over seven years and the balance is the same. As you can see, I have repaid the original loan. The minimum payment is a mortgage payment but not high enough to reduce the debt.”Kaida Flowers, a family and child therapist in Philadelphia, Pennsylvania, has struggled to try to pay her student loans from her undergraduate and master’s degree, and only makes around $50,000 a year working a job she pursued to try to help people and emphasized student debt is causing her and others who pursued similar career paths to struggle to get by.She has struggled to try to pay her student loans from her undergraduate and master’s degree, and only makes around $50,000 a year working a job she pursued to try to help people and emphasized student debt is causing her and others who pursued similar career paths to struggle to get by.When the payments resume, she will be forced to pay $300 a month again toward her student debt, most of which goes toward interest.“They’re killing the middle class,” added Flowers. “Part of the American dream is you go to school, you try to do something to have a better life, but it’s just not what it is.”TopicsBiden administrationUS student financeUS student debtJoe BidenUS politicsfeaturesReuse this content More

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      Columbia students threaten to withhold tuition fees amid Covid protest

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      Almost 1,800 students at Columbia University in New York are threatening to withhold tuition fees next year, in the latest signal to US academia of widespread preparedness to act on demands to reduce costs and address social justice issues relating to labor, investments and surrounding communities.In a letter to trustees and administrators of Columbia, Barnard College and Teachers College, the students said: “The university is acutely failing its students and the local community.”They accused the university of “inaction” since the start of the Covid-19 pandemic in March, when students began demonstrating against what they say are exorbitant tuition rates “which constitute a significant source of financial hardship during this economic depression”.The letter referred to national protests over structural racism, accusing the university of failing to act on demands to address “its own role in upholding racist policing practices, damaging local communities and inadequately supporting Black students”.Emmaline Bennett, chair of the Columbia-Barnard Young Democratic Socialists of America and a master’s student at Teachers College, told the Guardian the university and other colleges had made no effort to reduce tuition fees as they moved to remote learning models necessitated by pandemic conditions.“We think it says a lot about the profit motive of higher education, even as the economy is in crisis and millions of people are facing unemployment,” Bennett said. “This is especially true of Columbia, which is one of the most expensive universities in the US.”Demands outlined in the letter include reducing the cost of attendance by at least 10%, increasing financial aid by the same percentage and replacing fees with grants.Such reforms, the letter said, should not come at the expense of instructor or worker pay, but rather at the expense of bloated administrative salaries, expansion projects and other expenses that do not directly benefit students and workers.The university, the letter said, must invest in community safety solutions that prioritise the safety of Black students, and “commit to complete transparency about the University’s investments and respect the democratic votes of the student body regarding investment and divestment decisions – including divestment from companies involved in human rights violations and divesting fully from fossil fuels.“These issues are united by a shared root cause: a flagrant disregard for initiatives democratically supported within the community. Your administration’s unilateral decision-making process has perpetuated the existence of these injustices in our community despite possessing ample resources to confront them with structural solutions.“Should the university continue to remain silent in the face of the pressing demands detailed below, we and a thousand of fellow students are prepared to withhold tuition payments for the Spring semester and not to donate to the university at any point in the future.”A Columbia spokesperson said: “Throughout this difficult year, Columbia has remained focused on preserving the health and safety of our community, fulfilling our commitment to anti-racism, providing the education sought by our students and continuing the scientific and other research needed to overcome society’s serious challenges.”The university has frozen undergraduate tuition fees and allowed greater flexibility in coursework over three terms. It has also, it said, adopted Covid-related provisions including an off-campus living allowance of $4,000 per semester, to help with living and technology expenses related to remote learning.Columbia is not alone in facing elevated student demands. In late August, for example, students at the University of Chicago staged a week-long picket of the provost’s house as part of a campaign to disband the university police department, Chicago’s largest private force.The issue of student debt remains challenging. In a nod to progressives, President-elect Joe Biden last month affirmed his support for a US House measure which would erase up to $10,000 in private, non-federal loan debt for distressed individuals.Biden highlighted “people … having to make choices between paying their student loan and paying the rent” and said such debt relief “should be done immediately”.Some Democrats say relief should go further. In September, Senate minority leader Chuck Schumer and Massachusetts senator Elizabeth Warren co-authored a resolution which called for the next president to cancel up to $50,000 of outstanding federal loans per borrower.At Columbia, students say their demands for Covid-related fee reductions are only a starting point.“In the long-term, we need to reform the educational system entirely,” said Bennett. “We need to make all universities and colleges free, and to cancel all student debt to prevent enduring educational and economic inequalities.” More

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      How we can truly repay our frontline health workers: clear their debts | Alissa Quart, Astra Taylor And Brittany M Powell

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      How we can truly repay our frontline health workers: clear their debts Many of the workers risking their lives amid the pandemic are burdened with student debt. We owe them more than just applause by Alissa Quart, Astra Taylor And Brittany M Powell [embedded content] Photograph by Bayete Ross Smith/EHRP and The Guardian Every day […] More