https://www.nbcnews.com/news/latino/student-loan-forgiveness-supreme-court-rcna60704
Student loan borrowers thought they were getting relief. Now, courts have put
their lives on hold.
“It’s disheartening," said a woman who's been paying college debt for about
30 years and was approved for the Biden federal student loan forgiveness
program — which is now held up.
Jan. 5, 2023
Joy Morales-Bartlett could finally see an end to her decadeslong student debt
by the end of this year.
But her ability to pay it off now rests in the hands of the Supreme Court
<https://www.nbcnews.com/politics/supreme-court/supreme-court-hear-arguments-bidens-student-loan-forgiveness-plan-rcna58516>.
More than 40 million borrowers
<https://www.whitehouse.gov/briefing-room/statements-releases/2022/12/01/statement-from-white-house-press-secretary-karine-jean-pierre-on-the-supreme-court-taking-up-student-debt-relief-case/>
like Morales-Bartlett were eligible to cancel up to $20,000 in federal
student loan debt under President Joe Biden’s one-time student loan
forgiveness plan.
<https://www.nbcnews.com/politics/biden-administration-officially-opens-application-student-debt-cancela-rcna52612>
With a remaining balance of $19,000, the former University of California,
Santa Barbara, student applied to the program as soon as it opened, with high
hopes. Morales-Bartlett received an email from the U.S. Department of
Education two weeks ago saying her application had been approved.
But instead, her debt and that of roughly 16 million applicants
<https://www.ed.gov/news/press-releases/biden-harris-administration-continues-fight-student-debt-relief-millions-borrowers-extends-student-loan-repayment-pause>
who were also approved may never be forgiven if the Supreme Court sides with
lower courts in Republican-led states that blocked the program
<https://www.nbcnews.com/politics/politics-news/federal-appeals-court-temporarily-blocks-bidens-student-debt-relief-pr-rcna53531>.
A ruling is expected next year.
NBC News spoke to a dozen student loan forgiveness applicants nationwide,
ages 24 to 60, who had hoped for relief from their crippling debt — which has
left some struggling to afford medical expenses and basic necessities and
others unable to buy a home or start a family.
“It’s disheartening,” said Morales-Bartlett, 46, a former teacher from
California who has been paying off her $89,000 in student loan debt the last
thirty years and is currently dealing with health-related issues. “We’ve done
the right things this whole time, and we are being punished for it.”
The Biden administration has since closed the application process
<https://www.nbcnews.com/politics/politics-news/applications-student-loan-forgiveness-no-longer-accepted-rcna56903>until
the court decides the program's fate sometime next year.
Meanwhile, the pandemic-era federal student loan repayment pause has been
extended
<https://www.nbcnews.com/politics/white-house/biden-extends-student-loan-payment-pause-debt-relief-plan-remains-hold-rcna58418>
while the government awaits the court’s decision.
Struggling 'until the day I die with this crappy debt'
The onerous cost of higher education is a persistent challenge as communities
continue to encourage college completion, especially for groups such as
Latinos who lag in the number of adults with college degrees, with recent
gains set back
<https://www.nbcnews.com/news/latino/education-leaders-serving-latino-students-rethink-college-equity-post-rcna742>
by the pandemic.
Going to college is credited with greater opportunities for socioeconomic
mobility.
For Daisy Pérez, 49, earning a college degree and becoming a registered nurse
helped her family get out of poverty and “at least make ends meet,” her
daughter Cristher Estrada-Pérez said.
Estrada-Pérez said her mother may never be able to pay off the $90,000 in
student debt, which includes a Parent Plus loan
<https://www.nbcnews.com/news/education/parent-plus-loans-are-burying-families-college-debt-n1125391>
for Estrada-Perez’s college tuition.
“She’s never going to be able to own a home and earn enough to retire,”
Estrada-Pérez, 32, said.
The crisis has left parents and their adult children grappling with how to
pay off student debt, which has been steadily rising in the U.S. for more
than a decade, reaching $1.745 trillion this year
<https://educationdata.org/student-loan-debt-statistics#:~:text=Student%20loan%20debt%20in%20the,of%20all%20student%20loan%20debt.>.
The average federal student loan debt nears $30,000.
Estrada-Pérez, who is also the executive director of the Student Loan Fund
<https://www.slfnh.org/> in Connecticut, which helps predominantly Black and
Latino borrowers navigate their debt, is paying off $80,000 for her student
loans.
As Federal Pell Grant
<https://studentaid.gov/understand-aid/types/grants/pell> recipients,
Estrada-Pérez and her mother stand to get $20,000 in debt forgiveness if the
Supreme Court rules to keep Biden’s program. But still, that barely covers
the interest rates their loans have accumulated over the years, she said.
Estrada-Pérez, who majored in history at St. Joseph's University in West
Hartford, had aspired to become a lawyer, but “I couldn’t think about what my
debt would look like if I even attempted to go to law school.”
Lisa Brown, 60, of North Carolina remembers paying for college at the
University of Southern Maine with her parent’s help about four decades ago,
when tuition was about $3,000 a year. Now, attending a four-year university
can cost $25,000 to $55,000 a year
<https://educationdata.org/average-cost-of-college> on average.
After earning a bachelor’s in psychology, Brown returned to school in an
attempt to improve her job prospects. She graduated from Walden University in
2002 with a master's in forensic psychology.
This time around she ended up with $40,000 in student loan debt, which has
almost doubled to about $70,000 over the past decade because of compounded
interest. Brown also has a $17,000 Parent Plus loan — federal loans that
parents of dependent undergraduate students can use — from when her
31-year-old son was studying sound engineering at an art institute in Boston.
At Brown's age, medical bills are also starting to pile up, she said. Even
with insurance, she is still paying a $2,600 balance from an operation she
had two years ago.
“I’m going to struggle until the day I die with this crappy debt,” said
Brown, who is looking for work. “If they’re going to make us continue to pay
... then don’t make getting jobs harder for older people.” If approved, Brown
could receive up to $10,000 in loan forgiveness under Biden’s program.
Brown’s son still has about $50,000 in student debt despite being one of the
thousands of North Carolinians who received some student loan relief as part
of a multistate settlement with Navient, one of the nation’s largest student
loan servicers, over allegations of unfair and deceptive student loan
servicing and predatory lending practices, according to North Carolina's
Attorney General Josh Stein
<https://ncdoj.gov/attorney-general-josh-stein-wins-more-than-37-million-in-student-loan-relief-for-nc-borrowers/#:~:text=Additionally%2C%201%2C267%20North%20Carolina%20borrowers,servicing%20and%20predatory%20lending%20practices.>'s
office. He also applied to the currently blocked student loan forgiveness
program and is waiting to hear back.
The unresolved student debt crisis has many borrowers questioning whether the
ends justify the means. Esther Jean-Marie is one of them.
The 30-year-old of Haitian descent graduated from the University of Hartford
in 2015 and went on to complete a master's in nonprofit management and
philanthropy to increase her chances of making a livable wage and "set myself
up for success," she said.
After working multiple jobs to pay for college, Jean-Marie achieved her dream
of doing nonprofit work, but still ended up with $88,000 in student debt.
First-generation college graduates such as Jean-Marie, Estrada-Pérez and
Morales-Bartlett tend to have lower incomes and accumulate less wealth, on
average, compared to those with a parent who has a bachelor’s or higher
degree, complicating their ability to repay loans, according to a 2021 Pew
Research Center analysis
<https://www.pewresearch.org/social-trends/2021/05/18/first-generation-college-graduates-lag-behind-their-peers-on-key-economic-outcomes/>.
'I needed time'
Alexis V. said she survived an act of sexual violence while studying business
administration at the University of Southern California. She ended up taking
a health leave and graduated in December 2013, a semester later than expected.
"It cost me thousands of dollars just because I needed time to process the
trauma of sexual assault," Alexis, who now has $55,000 in student debt, said.
According to a survey
<https://docs.google.com/forms/d/e/1FAIpQLSc2pmh_ICxc8VEUSvAxEzyCESAOk4nyB7vXHeW1eDoAMRbU_A/viewform>
on sexual violence and student debt from the Sexual Violence Prevention
Association <https://www.s-v-p-a.org/>, her experience is not unique.
Experiencing sexual violence often leads to higher student loans and
increased difficulty repaying
<https://www.teenvogue.com/story/how-sexual-violence-can-student-debt-harder-to-pay-off>
the debt, founder and CEO Omny Miranda Martone said.
Alexis has been approved to receive $10,000 in loan forgiveness under Biden's
program. While it's still significantly less than what she had hoped, as the
first in her Filipino family to go to college, "I’d be better able to support
my parents. My dad could hopefully be less stressed about retiring."
The current pause on student debt repayment due to the pandemic has helped.
It made it easier for Alexis to afford living on her own. For Martone (who
uses they/them pronouns), not having the financial strain of repayment
allowed them to pursue their goal of starting an organization to prevent
sexual violence.
It also helped Jean-Marie and Nick Marcil of Pennsylvania afford long overdue
fixes to their cars.
Marcil, 24, would get about half of his roughly $18,000 in student debt
forgiven if the Biden federal loan forgiveness program is allowed to go into
effect. He earned a bachelor’s and a master’s degree in education from West
Chester University. Still living with his parents, he was hoping to be one
step closer to financial freedom and to being on his own.
'I feel like it'll never go away'
Since the program was put on hold, borrowers spoke of feeling their hopes
fade that the Biden administration would be able to prevent the states from
blocking the measure.
"There is compounded distrust from the public that this can even work,"
Brianna Dunlap, who has a $123,000 student debt, said. She had applied for
another student debt cancellation program
<https://www.whitehouse.gov/publicserviceloanforgiveness/?utm_source=pslf.gov>but
a change in the requirements precluded her from getting relief. Still, the
32-year-old from Connecticut reluctantly applied for the program and is
waiting to hear back.
Regardless of whether she qualifies, Dunlap would still be left with a
six-figure debt. "How could I plan on having kids and paying for their future
when my own student debt future is completely unknown?" Dunlap said,
explaining why she and her husband are considering not having kids.
For Illinois resident Megan Stemm-Wade, the payments she has made toward her
$39,000 student debt since finishing school in 2014 have barely lowered her
balance, since most of it goes toward interest. "It feels like it'll never go
away," she said. Her hope is that the student debt program will finally help
her take a meaningful step forward.
<https://www.nbcnews.com/now/video/supreme-court-agrees-to-hear-arguments-on-biden-s-student-loan-relief-plan-155961925786>
Thomas Gokey, a policy director at the Debt Collective
<https://debtcollective.org/>, a membership-based union for debtors, said the
secretary of Education has authority to "cancel student debt in the event of
an emergency" under the HEROES Act of 2003
<https://crsreports.congress.gov/product/pdf/LSB/LSB10818> and "to compromise
and settle student loans for any reason" under the Higher Education Act of
1965, which in part regulates how the secretary may administer existing loan
forgiveness programs
<https://crsreports.congress.gov/product/pdf/LSB/LSB10818>.
The Biden administration did use the HEROES Act, but by putting in place an
application process, Gokey said, it opened the door for Republicans to
challenge the program in court. The application was made to exclude a small
number of student loan borrowers (about 3%) who earn over $125,000 from
receiving relief during the first two years of the pandemic, Gokey said.
"But the entire program is now at risk," said Gokey, who applied to the
program hoping it would forgive a fourth of his student debt.
In response to a query from NBC News about the administration's next steps as
the program remains on hold, the Department of Education pointed to previous
statements by Education Secretary Miguel Cardona
<https://www.ed.gov/news/press-releases/biden-harris-administration-continues-fight-student-debt-relief-millions-borrowers-extends-student-loan-repayment-pause>
announcing the extension of the student loan repayment pause. Last week, the
White House said in a statement the loan forgiveness program is "legal,
supported by careful analysis from administration lawyers
<https://www.whitehouse.gov/briefing-room/statements-releases/2022/12/01/statement-from-white-house-press-secretary-karine-jean-pierre-on-the-supreme-court-taking-up-student-debt-relief-case/>,"
and stated that Biden "will keep fighting against efforts to rob middle
class families of the relief they need and deserve."
Carol Deas-Lopez, 60, a clinical psychologist from California, said she began
doing advocacy with the Debt Collective as a way to cope with "the depression
and anxiety that goes along with financial stressors like these, which have
the capability of rendering me or anyone else homeless or seriously wipe us
out financially."
Deas-Lopez qualified for the Biden program's maximum of $20,000 in federal
loan forgiveness. But with over $300,000 in debt, she sometimes wakes up in
the middle of night "just kind of in terror about the whole thing," she said.
If the Supreme Court rules in favor of the program, close to 20 million
people
<https://www.cnbc.com/2022/08/24/biden-expected-to-cancel-10000-in-federal-student-loan-debt-for-most-borrowers.html>
would have their debt fully canceled, according to the Biden administration.
“That's a big deal,” said Estrada-Pérez. “It’s about economic justice. We’re
borrowers who are not just struggling with student debt payments, we’re
struggling with inflation, cost of living.”
Morales-Bartlett would be one of those 20 million people who would be
debt-free through Biden's program. It would lift a huge weight off her
shoulders after having to quit her job due to health reasons — and already
using up her retirement savings.
"I hope," Morales-Bartlett said, "that the court finds a way to not stand in
the way of this anymore."
