In a letter written to the president, 80 lawmakers have urged the cancellation of up to $50,000 of student loan debt per borrower.
“Cancelling $50,000 of student debt would give 36 million Americans permanent relief and aid the millions more who will eventually resume payments their best chance at thriving in our recovering economy,” the letter states.
“In light of high COVID-19 case counts and corresponding economic disruptions, restarting student loan payments without this broad cancellation would be disastrous for millions of borrowers and their families.”
Student loan payments have been paused for nearly two years now since the beginning of the COVID-19 pandemic. Borrowers haven’t had to make a single payment, and the government has picked up part of the tab so interest on student debt hasn’t accumulated either.
It is true that millions of Americans are currently swamped with student loan debt.
Over 43 million Americans have student loans, with an average of $39,351 each.
Student debt totals $1.75 trillion ($1,750,000,000,000) as of 2022, increasing by over $1 trillion in just 13 years, from a total of “only” $670 billion in 2009.
Putting aside the statistics – the real impact of student loans on borrowers’ lives can be heartbreaking.
According to a lengthy story in The Wall Street Journal, “Recent film program graduates of Columbia University who took out federal student loans had a median debt of $181,000.”
“Yet two years after earning their master’s degrees, half of the borrowers were making less than $30,000 a year.”
Those numbers are even more shocking considering Columbia’s $11.3 billion endowment.
The Journal tells the story of Zack Morrison, a 29-year-old art student who, after graduating with a Master of Fine Arts (MFA) in film from Columbia, makes between $30,000 and $50,000 each year.
Morrison’s student loan balance totals nearly $300,000 with accrued interest.
“There’s always those 2 a.m. panic attacks where you’re thinking, ‘How the hell am I ever going to pay this off?’” Morrison said.
Or consider Matt Black who graduated with an MFA in film from Columbia in 2015, with $233,000 in student loans.
Black earns $60,000 per year, but with interest, his loans have grown to $331,000 in just six years.
According to The WSJ, in 2020, Black took a car ride with three friends from Columbia’s film program.
“They calculated they collectively owed $1.5 million in loans to the federal government.”
“Financially hobbled for life,” he said. “That’s the joke.”
These stories make clear that even though universities and loan providers sell loans to prospective students promising a bright future – it doesn’t always pay off.
And sometimes, loan providers can be predatory.
Navient, once one of the nation’s largest student loan providers, recently agreed to pay $1.85 billion to settle claims “that it had made predatory loans that saddled borrowers with crushing debts they were highly unlikely to repay,” according to The New York Times.
Josh Shapiro, the attorney general of Pennsylvania, said, “Navient repeatedly and deliberately put profits ahead of its borrowers – it engaged in deceptive and abusive practices, targeted students who it knew would struggle to pay loans back and placed an unfair burden on people trying to improve their lives through education.”
The push to cancel student loans can come from a good motive, that is, to help those who may now spend decades of their life paying for a costly decision to attend a university they couldn’t afford.
But what about those who took out student loans, and have worked hard to pay them off?
Take me, for example.
I graduated from college with five figures in student loan debt and have spent the last several years working hard to pay that debt off. Every month, I paid far more than the minimum payment so that I could pay off my loans much sooner than the regularly scheduled 10-year plan.
Just a couple months ago, I made my final payment.
So, if student loans are cancelled, where is my refund?
Why should I, and the millions like me, who have worked hard to pay off the loans we agreed to take out, be punished for our work ethic and financial stewardship?
Apparently, some in the government are determined to ensure that no good decision goes unpunished.
And here’s another question. Why is student loan debt so special? Why are dozens of lawmakers advocating for student loan cancellation, but not the elimination of other kinds of debts?
How about mortgage cancellation? Car loan cancellation? Credit card debt cancellation? Personal loan or business loan cancellation? Federal and state government debt cancellation?
If we’re going to cancel student loan debt, why not all other kinds of debt too?
Proverbs 22:7 teaches:
“The rich rules over the poor,
and the borrower is the slave of the lender.”
So, it is true that debt can be a great worry for many people; it can “financially hobble” someone for decades of their life.
But it’s not clear how student loan cancellation would be anything other than unfair to those who have already paid off their loans, or why student loans deserve cancellation more than any other kind of debt.
Related articles and resources:
Photo from Shutterstock.