About the time I was talking to USC’s Associate Director and Alan Collinge at the Student Loan Justice Facebook site, Michael “The Guardian” reporter was talking to students there about payback issues. Everyone is concerned about the startup of loan paybacks. It is a serious issue for most. ‘There’s no way I can pay it’: Americans dread restart of student loan payments, US student debt | The Guardian, Michael Sainato Many Americans are dreading the return of interest accrual and the restarting of their monthly student loan payments as a huge political fight over Joe Biden’s debt forgiveness plan rages on. Americans have .635tn in federal student loan debt, held by 43.8 million borrowers. Some 26 million people applied or were automatically
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About the time I was talking to USC’s Associate Director and Alan Collinge at the Student Loan Justice Facebook site, Michael “The Guardian” reporter was talking to students there about payback issues. Everyone is concerned about the startup of loan paybacks. It is a serious issue for most.
‘There’s no way I can pay it’: Americans dread restart of student loan payments, US student debt | The Guardian, Michael Sainato
Many Americans are dreading the return of interest accrual and the restarting of their monthly student loan payments as a huge political fight over Joe Biden’s debt forgiveness plan rages on.
Americans have $1.635tn in federal student loan debt, held by 43.8 million borrowers. Some 26 million people applied or were automatically accepted for student debt relief under Biden’s plan before applications were suspended because of lawsuits launched by Republicans.
That plan would provide student debt relief of up to $20,000 for eligible borrowers and up to $10,000 for borrowers with less than $125,000 in annual individual income.
But Republicans pushed to prevent any further extensions of student loan payments and want to overturn Biden’s plan that has now been tied up in the US courts since last year, with a US supreme court ruling on the issue expected very soon.
Michael Chaney, a 56-year-old truck driver in Ohio, has student debt from a retraining program through the Ohio Bureau of Vocational Rehabilitation that he went into after getting injured on the job while working in a foundry in the late 1990s.
“I had to take out student loans to help pay for the schooling, or else they wouldn’t help me,” said Chaney.
He said his student debt increased due to having to repeat some math classes. Even after Chaney filed for bankruptcy in 2009 after getting divorced, his student debt wasn’t able to be discharged. He worked in IT after finishing schooling but switched to truck driving to be able to work more hours.
“There’s no way I can pay it. They’ve got it set up so you can never pay it off,” said Chaney, who still owes around $60,000 in student loans. “I keep making $400 or $500 a month payments and none of the principal goes down. I worked all my life and I don’t have nothing. I’ve worked six days a week, 12-hour days in the steel mill before I got hurt. We’re barely staying alive. I can’t keep up. I can’t pay it.”
The debt ceiling package negotiated between Biden and the House speaker, Kevin McCarthy, and signed into law in June 2023 ends the pause on federal student loan payments and interest.
A spokesperson for the US Department of Education told the Guardian the department will be in contact with borrowers before repayments begin. Interest accrual on student debt is set to begin occurring again in September 2023 and the first payments are due in early October.
For millions of Americans, restarting payments or even being able to keep up with payments, won’t be financially possible.
“Adding another expense to my budget would put me beyond a financial hardship,” said Anne Marie Mosley, a teacher in Massachusetts who is still waiting to see if her public loan service forgiveness application is approved.
“When payments restart, I will not pay. I’m an underpaid teacher and I just won’t have the funds,” said Jacque Abron of Texas.
Janelle Gallardo, a mother of three in California, started paying her student loans in 2016 when she completed her master’s degree, with payments ranging from $200 to $500 a month. Under the student loan payment pause, she has struggled to keep up with the rising cost of living and currently works two jobs to make ends meet.
“I went from paying about $1,000 a month to now over $2,000 in groceries, I cannot even imagine paying another large bill like this,” said Gallardo. “I don’t even know how we would make it work with resuming payments based on how much everything has gone up in my state. I have not been paying during the pause because all our money either goes to bills or taxes, we haven’t even been able to afford health insurance right now.”
But Republicans have also pushed to add retroactive interest to student loans that did not accrue during the pause and revoke forgiven debt for over 250,000 borrowers who applied and were approved for public service loan forgiveness.
Christina Winton of Phoenix, Arizona, has struggled with paying her student loans since graduating with her bachelor’s degree and completing her master’s degree program.
She has filed for public service loan forgiveness, after having to obtain years of her bank statements because her loan service provider did not have records to prove she made the required 10 years of payments to be eligible.
She explained student debt has affected her considerably over the years and despite keeping up with payments, through loan service providers changing rules and ballooning interest, she still owes more than she originally borrowed.