Borrowers and Student Loan Advocates Agree: Cancel Student Debt | Remark
On May 1, the federal pause on student loan repayments is due to expire. One of President Joe Biden’s first executive actions exercised his granted authority in the Higher Education Act. 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 Education Secretary Miguel Cardona to take another step: cancel student debt mired in his various income-contingent repayment (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 Cardona highlights the myriad ills of IDR borrowers and urges the speedy cancellation of federal loan debt.
“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, PHEAA, the nation’s largest student loan servicer, found that out of more than 8.5 million customers, only 48 borrowers would benefit from debt forgiveness under the IDR by 2025. Additionally, internal data from PHEAA 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, a member of the national 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 (CRL), 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 are coming 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 families rely heavily on federal financial assistance 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,” said U.S. Representative Alma Adams, a former student and HBCU 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.
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 North to Chapel Hill and CRL. 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, Wheatle explained the remaining challenges with student loans.
“It looks different for black women and women of color,” 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 one that falls squarely within President Biden’s purview is the ability to write off 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 CRL and the National Consumer Law Center’s Student Loan Borrower Assistance Program to quantify black support for student debt:
• 93% support increasing state funding for HBCUs to match funding for predominantly white institutions.
• 91% support increasing the amount of the Federal Pell Grant.
• 90% of aid automatically adjusts student loan repayments based on the borrower’s income.
• 84% of Black student borrowers support blanket $50,000 student debt forgiveness, including Parent PLUS loan borrowers who are no longer eligible.
A November survey by UNCF and CRL concluded that “federal investment can step in and help Black students and borrowers succeed and prosper.”
With a plethora of research and borrower testimonials, the political question becomes “when” or “if” relief will be granted.