Cancel student loan debt, by Charlene Crowell | Richmond Free Press
One of President Biden’s first executive actions exercised his granted authority in the Higher Education Act.
On May 1, the federal pause on student loan repayments is due to expire. As the end of the extension approaches, an estimated 44 million student borrowers and their collective debt of $1.6 trillion will soon be affected.
But a broad and diverse national coalition of more than 140 advocates is urging US Secretary of Education Miguel Cardona to take the next step: cancel student debt mired in his various income-driven repayment, or IDR, programs. Black borrowers are an integral part of efforts to eliminate the unsustainable financial burden.
IDR repayment was introduced in 1992 as a way to affordably manage student debt. Beyond reasonable monthly payments, the civil service loan forgiveness program promised that those with years of timely payments could expect debt forgiveness.
A Feb. 9 letter to Secretary Cardona highlights the myriad ills of IDR borrowers and urges speedy federal loan debt cancellation.
“To qualify for debt forgiveness under IDR, student borrowers must enroll in one of several income-driven repayment options and stay in that plan for decades,” wrote the defenders. “To enroll, borrowers must first learn about the program, determine which plan meets their needs, submit a litany of paperwork and documents, and then repeat this process every year for more than two decades.”
Although the Department of Education’s own data indicates that 4.4 million student borrowers have been on income-driven repayment programs for 20 years or more, only 32 borrowers have had their loans forgiven.
Similarly, the Pennsylvania Higher Education Assistance Agency, or PHEAA, the nation’s largest student loan servicer, found that of its more than 8.5 million customers, only 48 borrowers would qualify for debt forgiveness under IDR by 2025. Additionally, internal PHEAA data projects that the number of IDR borrowers receiving debt forgiveness will decrease by 83% between 2022 and 2025.
“Without action from this administration, only 1 in 23,000 borrowers will continue to have a chance of cancellation, and this is unacceptable,” said Persis Yu, policy director and counsel at the Student Borrower Protection Center, member of the National Border Protection Center. coalition. “The Biden administration can help millions of borrowers and restore confidence in this vital program by implementing an IDR waiver.”
“Decades of poor service, messy paperwork and policy failures have shattered borrowers’ faith in this program,” said Julia Barnard, student loan researcher at the Center for Responsible Lending, who is also a member of the coalition. . “We call on the education department under the Biden administration to make IDR reform an urgent priority in the months ahead.”
The strongest calls for student debt forgiveness come from borrowers themselves, especially current or former black borrowers whose families are already forced to deal with a stubborn racial wealth gap. With fewer financial resources, many black students rely heavily on federal financial aid in the form of Pell grants and federal loans. When these funding sources are not enough to cover tuition, parents and/or other family members often borrow Parent PLUS loans to cover uncovered costs.
“When we think of student debt as a whole,” noted Congresswoman Alma Adams of North Carolina, a former HBCU student and faculty member, “we think of young people. But I have to tell you that there are still a lot of seniors paying off their student loans.
Rep. Adams’ comments are part of a documentary on student debt, “My Yard, My Debt: The HBCU Student Borrower Experience,” a collaborative project of the United Negro College Fund, the Center for Community Capital at the University of Carolina du Nord in Chapel Hill and the Center for Responsible Lending. Guaranteed by the Lumina Foundation, the film is based on surveys, focus groups and recent research on the subject.
Dr. Katherine Wheatle, a first-generation college student, shared how, even today, her student loan experience continues to affect her and her mother, who took out a Parent PLUS loan. From his position as Head of Federal Policy and Equity Strategy at the Lumina Foundation, Dr. Wheatle explained the remaining challenges with student loans.
“It looks different for black women and women of color,” Dr. Wheatle said. “While I may be able to earn a salary similar to that of a white man or a white woman – my peers and my counterparts – my income is slimmer and goes very differently from what could happen with my peers .”
For Winston-Salem State University alumnus Robert Stephens, student debt has stunted his ability to buy a home, start a business and start a family.
“This pandemic has exasperated people’s ability to care for themselves…savings are wiped out…We need help and a great way that falls squarely within President Biden’s purview is the ability to cancel student debt. Listen to the people on the ground and do it,” Stephens urged.
A related joint policy analysis shows that many people agree with Stephens’ view. The Student Borrower Protection Center was joined by the Center for Responsible Lending and the National Consumer Law Center’s Student Loan Borrower Relief Program to quantify black support for student debt relief. The analysis shows:
• 93% of Black student borrowers support increasing the level of public funding for HBCUs to match funding for predominantly white institutions;
• 91% support increasing the amount of the Federal Pell Grant;
• 90% support automatically adjusting student loan repayments based on the borrower’s income; and
• 84% of Black student borrowers support blanket $50,000 student debt forgiveness, including Parent PLUS loan borrowers who are no longer eligible.
A November 2021 survey conducted by UNCF and CRL concluded that “federal investment can step in and help Black students and borrowers succeed and thrive.”
With a plethora of research and borrower testimonials, the political question becomes “when” or “if” relief will be granted.
The author is a senior research fellow at the Center for Responsible Lending.