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Student debt is the second largest form of consumer credit after mortgages; Currently, more than 45 million people owe almost 1.7 trillion dollars, which means that people can spend years paying off that debt, depending on their means, generating economic, gender and racial inequality among the community.
In recent years, the Biden administration has attempted to soften and expand student debt forgiveness programs launched under the Obama administration, achieving some success in the process but continually facing legal challenges from Republican states that have paralyzed an extensive program presented in 2021.
Borrowers have been repaying for a decade or two, or working in public service jobs, to try to pay off their debt, but the loan servicing landscape is complex and rife with regulations that are confusing to many people.
Every 26 seconds, one of those student loan borrowers defaults on their loan, experts said during a briefing by Ethnic Media Services.
Adam Minsky, a student loan lawyer, explained the current situation with the Biden administration, which, although it has promoted several programs to support payments, has also left few options for others due to unclear key points for students. .
Approximately 53 million dollars have been approved, carried out through different initiatives, one of the largest was the Reckoning and IR program, a temporary document that allows lenders to offer a 30 or 35 years, depending on your income; However, this program has not been well organized or documented, Minsky said.
About 1 million borrowers have already received enough credit to surpass that 20 or 25-year mark, allowing their loans to be forgiven, however this program will end in the coming months.
Another change is in the public service loan forgiveness program, or PSLF, a program that provides relief for those who commit to work in nonprofit or government organizations at the federal, local or state; This would reduce the repayment to 10 years, but the program has very complex rules and not as good oversight, so it has not been adequately managed.
The Biden administration implemented new regulations that went into effect in July of last year, which do several things to improve PSLF, offering more flexibilities in repayment periods and eliminating some things like consolidation, which went from 7,000 approvals in 2020 to 900 thousand as of last month's count.
There is also a program for people with disabilities who cannot obtain employment due to medical conditions. This program went into effect last July and makes it easier for students to access.
In addition, Minsky added, the administration created another program called SAVE, based on income, being the most accessible program and where it already has 8 million borrowers enrolled.
Michele Shepard Zampini, senior director of university affordability at TICAS, explained that since March 2020, borrowers did not have to pay their student debts the way they do now, because with the pandemic came great economic flexibility that students had not had. students, the administration wanted to give them a little relief from the crisis that was being experienced.
Shepard stated that many times the payments are very high and many times people have to choose between paying essentials, such as rent, food, rent, or other necessary services before paying their debt.
In turn, he said that a viable option is to lower the cost of these payments so that families do not have to choose between one or the other.
92 to 93 percent of students have federal student debt and the rest is through private loans from banks, credit unions or something else, while 75 percent of students attend a public university, so implementing a good federal program would be helping the majority of the student population.
Virginia Brown, a recently retired mental health counselor and social worker, said she was able to move close to her family by receiving $325,000 in student loan forgiveness last year.
Brown explained that public funding goes up and down, depending on the state.
Experts highlight that there is great inequality among undocumented students, since they cannot access student financing aid, which includes student loans, while only those who have a social security number are candidates.
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