Student loan repayments are about to restart. Can American families afford it? : NPR



MARY LOUISE KELLY, HOST:

Federal student loan payments have been on pause since March 2020. Well, that temporary relief is set to expire next week if President Biden refuses to extend it.

ARI SHAPIRO, HOST:

In the meantime, the administration has taken other steps to ease the student debt burden. He forgave billions of dollars in federal student loans by enforcing the borrower defense rule.

KELLY: And it’s a rule that allows borrowers to ask the Department of Education to erase their student debt if their school has lied to them, for example, about job prospects or their likely salary.

SHAPIRO: Take the story of William Alexander from Jacksonville, Florida. He says when he applied for classes in 2015, his for-profit university made all sorts of promises.

WILLIAM ALEXANDER: The admissions counselor told me I had a guaranteed career. They told me my total tuition would be around $8,000, and instead it turned out to be close to 50,000.

KELLY: He had trouble making his payments, so he filed a Borrower Defense Claim. Then, last week, he was notified that his entire loan balance was being forgiven, freeing up another $3-400 a month.

ALEXANDRE: I was blown away. I didn’t expect it at all, so – put a huge smile on my face (laughs), of course, when I got it. And, you know, I ran around the house telling everybody, hey; my student loans are cancelled, my student loans are cancelled. So yes, I’m happy as a pig in the mud (laughs).

SHAPIRO: Alexander says the news is life changing. He and his wife are now looking at homes, and he feels like he will have more time to volunteer in his community.

KELLY: Many other borrowers, however, are still waiting for relief, and we asked a few of them to share their stories.

SHAPIRO: Some are still paying off student debt from decades ago as their own children reach college age. Others are already working multiple jobs to offset the rising cost of living, and restarting monthly payments will further squeeze their budgets.

JAYSON DOUGLAS: My name is Jayson Douglas and I live in Commerce, Texas. I’m 29 years old. My monthly payments are $835 per month. The break was certainly useful, but because of inflation, I had to take up a few other occupations, especially with the rising rents. I was a Lyft driver for a while, but I also started working at another part-time job. And I really think our government needs to completely cancel student loans, at least cancel the interest and return to the original loan principal.

PARI: My name is Pari and I live in Ohio. I am 52 years old. I have 20 year student loans for certification to have a paralegal career. The amount I currently owe on this loan is more than I took out 20 years ago. Second, I have Parent PLUS loans totaling almost $200,000 to send two of my children to college. These two were totaling $700 a month. The added layer for me is that I’m a black woman, and America has made it clear that it really doesn’t resent black people that much. The weight of student loans weighs on all the other decisions I’ve tried to make, you know, home ownership and all that. The way compound interest is simply paralyzing. It really feels like a robbery, and I hope this nightmare ends.

CAROL OLDHAM: I’m Carol Oldham, Jamaica Plain, 51 years old. I still owe 12-15 thousand, and my husband – 15 thousand as well. It’s about 600 a month. And, you know, of course, part of that is because you’re mostly paying interest. My husband is the director of his department. He’s an economics professor. I am regional manager. And yet, it is still difficult to pay them each month in addition to our mortgage. And, of course, one of the things about turning 50 is that all of a sudden it’s like, oh, now I need glasses. And everything seems really expensive right now. Making it so that only wealthy people can go to school or get higher education in our society – if that’s the outcome I think we’ll all be sorry for that and maybe people aren’t thinking long term .

SHAPIRO: It was Carol Oldham in Massachusetts, Peri in Ohio, who didn’t share her last name for privacy reasons, and Jayson Douglas in Texas.

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