If you had to guess what the total student loan debt in the U.S. is, what would it be?
As of June, U.S. borrowers have a collective $1.77 trillion in federal and private student loan debt, according to the Federal Reserve. That’s more than double what was owed at the end of 2010.
Nearly 1 in five U.S. adults, or 45 million people, have student loan debt. However, the burden is not evenly distributed. Women tend to borrow more than men, and Black students take out more and at higher rates than all other races and ethnicities, NerdWallet reports.
Had the Biden Administration’s student loan forgiveness plan been allowed to move forward, 40 million borrowers would have been eligible for at least $10,000 in debt forgiveness, immediately providing them with a measure of relief to the burden of student loans. Of the 26 million people who applied for debt relief prior to the Supreme Court’s decision, nearly 16.5 million would have had their debt completely discharged.
Those who would have been provided a modicum of relief, will now instead be responsible for the full weight of their student loans — principal and interest. Borrowers like Melissa Santos, who owes about $93,000 for her undergraduate degree, were hopeful that something would be done.
“I thought [canceling student loan debt] was a ray of light, to actually get some justice in terms of what we’ve had to sacrifice,” she told URL Media partner Prism. “You struggle with your self-worth, your mental health. Those are additional chains that people don’t talk about.”
Santos has since entered a graduate program to avoid having to repay her student loans.
Others, like The Debt Collective’s Deputy Press Secretary Maddy Clifford, plan to boycott the collection of student loan debt.
“Student debt is inherently predatory,” she said. “I don’t think people understand that, and it worsens all existing economic disparities across racial and gender lines.”
She said her biggest concern is that borrowers will have to choose between making their student loan payments and paying for things like housing, healthcare and food.
The Debt Collective provides five options for getting to a $0 payment that include Borrower Defense Loan Discharge for those who were defrauded into accepting federal student loans; applying for the Public Service Loan Forgiveness program for those who work in governmental or for nonprofit organizations; signing up for an Income-Driven Repayment Plan; taking advantage of the three-month grace period known as the ‘safety net’; and staying in school to take advantage of the in-school deferment period.
If none of those options to a $0 monthly payment are viable for a borrower, the Debt Collective offers the following advice:
“It is not always possible to safely get to $0 monthly payments. Just like other direct actions and civil disobedience, the risks do not fall equally on everyone. If you are not able to get to $0 monthly payments safely, it is okay to do what you have to do to protect yourself. Some of these options might not get you all the way to $0 a month but could dramatically lower your monthly payment, and that might add a measure of protection for you and your family. There are other ways to organize and build pressure to win student debt cancellation.”
As for Clifford, she told Prism that she thinks there could be a mass default on student loan payments.
Prior to the pandemic pause on student loan payments, a survey commissioned by The Pew Charitable Trusts found that about a third of federal student loan borrowers experienced default. The survey found close to 70% defaulted more than once because the factors that caused the first default were not adequately addressed to prevent a subsequent default.
“What people don’t understand about defaulting is that people do it when they’re just overwhelmed with making payments,” Clifford told Prism. “Defaulting only further penalizes people who can’t pay by ruining your credit … You fall into this web where now your wages are going to be garnished, so it’s going to be hard to pay your bills.”
For those with student loan debt hanging over their heads, just know that I’m right there with you. May we all find peace (and a literal pot of gold) in the near future. —Alicia Ramirez
Uplift. Respect. Love.
