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Sunday, August 7, 2022

Debt reduces student enrollment, forgiveness could mean a reprieve

Pamela Cruz. Peninsula 360 Press [P360P]. 

Nationwide student loan indebtedness totals $1.7 trillionwhich are divided into among 43 million studentsThe debt that seems to be never going to end is becoming more and more difficult to pay off.

This situation has caused hundreds of thousands of students to think seriously about enrolling in any of the country's universities, as the payments could be chains that will be difficult to break for many years to come.

Gabriel Stewart became $52,000 in debt after graduating as an audio-visual technician from SAE Expression High School in Emeryville. To the expenses were added those of having a child, so he had to live at his father's house for a few years. He was finally able to move out to live a married life in an apartment, but the burdens continue.

"I was about $52,000 in debt, I couldn't pay rent anywhere because, in addition to student loans, I had credit card debt and that really made it difficult for us to start a family and be free," she said during a briefing held by Ethnic Media Services.

Currently, Gabriel is still uncertain if he will be able to continue paying his debt tomorrow, because although he has moved on and gotten a job at a software company, the labor payments have been delayed due to the COVID-19 pandemic. 

Delayed payments on student debt could affect Gabriel's ability to purchase a car or shop for a home in the future.

"It's always living with that looming feeling of when the payments start again and how are we going to pay them? It's a constant stress in my head," he detailed.

For Ro Khanna, representative of California's 17th congressional district, the issue of student loans is a big problem nationwide, because while there are people who can afford them before the age of 30, there are many who cannot, because their income does not allow them to do so.

The official said that student loans should be forgiven for those earning less than $125,000 a year. However, this is unlikely to happen.

"We need to forgive those loans and we have the ability to forgive them. The president has the executive power to say that student loans can be forgiven. The president has already exercised the power to delay student registrations so he can delay loans and he can say people don't have to pay for a while," he referred.

He stressed that if student loans are forgiven, people will be able to raise families, buy homes and start businesses. 

"It's really lifting the burdens on this next generation so they can pursue their dreams. So we progressives are going to keep pushing for the administration to do this," he added.

Kat Welbeck, Civil Rights Counsel at the Student Borrower Protection Center noted that the $1.7 trillion in student debt has become the second largest class of consumer debt in the country, second only to mortgages.

"Black and Latino debtors have less household wealth and take out more loans to pay for school, so they have more debt, which cuts into opportunities for long-term wealth creation," said Welbeck, who added that, over generations, the cycle is likely to repeat itself.

According to the organization Kat works for, about 90 percent of African-American and 72 percent of Latino students go into debt to pay for college compared to about 66 percent of white students. 

In this regard, he noted that African-American borrowers have a debt of about 95 percent of their original balance even 20 years after starting college, while in the case of Latinos the debt reaches 83 percent of the total, a very different situation from white borrowers, most of whom pay off their debt approximately 12 years after starting college.

"If we are going to talk about creating a more equitable and fair economy, we cannot overlook the disparate effects of the student debt crisis and how it continues to perpetuate many systemic barriers that already exist in this country," he stressed.

In his remarks, Joe Jaramillo, senior attorney for the Oakland-based Housing and Economic Rights Advocates (HERA), noted that predatory entities, such as for-profit schools, are in particular need of student loan relief and assistance. 

For-profit colleges have benefited the most from a business model in which students are pressured to take out expensive federal and private student loans, with the promise of a short-term education leading to high salaries. 

"There are currently more than one million students enrolled in for-profit schools and studies have shown that they are less likely to graduate, more likely to default on their student loans and more likely to end up with a higher debt load," he said.

The clients of these types of schools are mostly low-income Latino, African-American and older students whose debt is so high that they often end up with garnished wages, no social security benefits and no tax refunds. 

"Private debts are treated like any other, such as credit card or loan debts which usually requires them to go to court, which can also be very detrimental because many people cannot afford legal representation," the attorney pointed out.

And is that, after taking a school loan that generates such a high debt, students "can't afford to buy a house, can't get a car loan, can't access credit because of the damage to their credit score, some are afraid to get married and burden their partner with debt."

Andrea Campos was left with a $13,000 debt after majoring in the criminal justice program at Heald College in Hayward - part of the Corinthians institution - and after years of having her debt passed from one creditor to another, HERA was able to help her get her debt forgiven without waiving her credits.

"This has impacted my life significantly? I had the prospect of being hired, but was denied the opportunity because my debt-to-income ratio was too high and I was considered an at-risk type of employee ... I have also not been approved for credit cards, car or home loans," Andrea said.

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