Biden grants reprieve for student loans, but borrowers want permanent relief

“I say jokingly that unless I get hit [and killed] by a bus, I’ll never repay those loans,” said Madden, whose monthly debt payment of $225 stems from his undergraduate studies at Monmouth College and is pursuing a master’s degree at several for-profit universities. “It’s a constant state of anxiety, and it basically put me in limbo.”

The pause on federal student loan repayments, which Congress authorized in 2020 to help borrowers during the pandemic-related economic disruption, has been extended five times under Presidents Trump and Biden, each time drawing a sigh of relief. from many of the millions of borrowers across the country who benefit.

The extensions provided a temporary lifeline, but they still left many borrowers dreading each new repayment deadline and eager for Biden to take more drastic measures to bring them permanent relief, as he promised during the campaign. electoral.

The student debt crisis predates the pandemic, and many of the 43 million people who have federal student loan debt will not be able to make payments even when COVID no longer negatively affects the economy. . According to data from the Department of Education, more than half of federal student borrowers were in default, deferred or not repaying their loans for other reasons before the pandemic began. A survey by the non-profit Student Debt Crisis Center found nearly 90% of full-employment borrowers said they wouldn’t be able to resume payments if they restarted in February.

Lawyers are pushing Biden to keep his promise to forgive at least $10,000 in student loan debt per person, while some lawmakers and activists are pushing him to relieve borrowers by forgiving up to $50,000 in using its executive power.

Some who took advantage of the break told the Globe they appreciate the leeway in their budgets at the moment, but fear they won’t be able to make payments when they resume in May.

For nearly two years, Jill Santola, 57, hasn’t had to worry about buying groceries or paying bills on top of the student loan payments she took on to support her two children to go to university. But with the break set to end in a few months, she fears having to revise her monthly budget.

Santola took out around $75,000 in loans, and due to high interest rates, she still owes the same amount after paying around $30,000. The Clarkston, Michigan resident said she could have retired four years ago and started collecting the pension she earned as a teacher, but she continues to work to pay off the loans .

Over the past 10 years, she has written to three presidents and their vice presidents, as well as her representatives in Congress, asking for help. Yet her loans remain a ‘jail sentence’ because no matter what she does, it will be nearly impossible to repay them.

“I felt like I finally had a chance to breathe for a little while, and with the payments coming in again, I have a lot of anxiety,” Santola said.

Massachusetts lawmakers are leading the charge on Capitol Hill to push Biden to permanently forgive some student loans. Sen. Elizabeth Warren and Rep. Ayanna Pressley have co-sponsored resolutions in their respective chambers calling on Biden to relieve up to $50,000 in student loan debt per borrower. More than 80 members of Congress support the resolution, including Senator Ed Markey of Massachusetts.

Biden has said he doesn’t believe he has the power to write off so much debt without congressional legislation, and experts disagree on the legality of such a move.

At a virtual town hall on student debt on Thursday that included Senate Majority Leader Chuck Schumer, Pressley praised Biden for the extended hiatus and argued it had laid the groundwork for action. more radical executive.

“It was a political choice, which recognized the crushing burden this debt placed on millions of workers and families in the midst of this ongoing pandemic,” Pressley said at the town hall. “Now, in less than 100 days, the Biden administration has another opportunity to stand on the right side of history and write off $50,000 in student debt with the stroke of a pen.”

The move would wipe out student debt for nearly 84% of borrowers, or more than 36 million people, according to April 2021 data from the U.S. Department of Education. In Massachusetts alone, more than 900,000 people owe about $31 billion in student debt, and canceling $50,000 in debt would wipe out debt for more than 80% of those borrowers, Warren said.

“The payment pause gave people a taste of what it’s like to be debt-free on student loans,” Warren said. “We need to make this permanent for millions of people across this country.”

As Democrats push for cancellation, there is some bipartisan momentum around another bill called the FRESH START Through Bankruptcy Act. This bill would change current law to allow federal loans to be discharged in bankruptcy proceedings 10 years after the first payment is due or in the event of undue hardship.

Warren, who is not one of the sponsors of this bill, declined to say whether she would support that, saying she pledged to cancel as a way to relieve borrowers of the nation’s collective $1.7 trillion student debt.

“I’m not going to negotiate against myself,” Warren said. “We need the president to forgive $50,000 in student loan debt.”

But it seems unlikely that Biden will use his executive power to write off any amount of student loan debt anytime soon. During his Jan. 19 press conference, Biden dodged a question about his campaign promise to cancel the loans. Additionally, his December 2021 statement announcing the extended payment pause called on borrowers to “do their part” by using Department of Education resources to prepare for repayment.

For some people with student loan debt, the break did what it was meant to do – provide temporary relief during a time of economic upheaval. Christopher Gaunya, who lives in Florence, Massachusetts, was grateful for the pause in his monthly student loan payment of $670 after being laid off in 2020. Now that he has found a new job with the Veterans Health Administration , he felt capable of resuming his student loan repayments in February. Extending the break, however, gives the 59-year-old more time to prepare for the refund.

For others, the break provided a temporary lifestyle improvement. Barbara Lucci, a 57-year-old Worcester, Mass. resident, has been able to spend the $166 that would usually go towards paying off her $63,000 loan from college on other expenses over the past two years. Although his monthly student loan payment was relatively low — the average is $461 — Lucci was able to go out to dinner once a week and take horseback riding lessons, in addition to covering the rising costs of his prescription drugs.

“Having that money, for me, just adds a quality of life that I wouldn’t have without it,” she said.

Haley Fuller can be contacted at [email protected]

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