By Gloria DULAN-Wilson
In
America a
college education used to be the ticket to a successful middle-class
lifestyle. But
over the past two decades the cost of college has skyrocketed, debt has
taken a chokehold on many new college grads and professionals, and too
many borrower are stuck in a quagmire of student loans, and can’t
afford
to buy a home, start a business, or save for retirement, take care of
their health, etc. So, while
there might not be a Robert Smith to come forth and pay off all their
college tuitions, college borrowers can rejoice because President Biden
and Vice President Harris' Student Loan Forgiveness Act is coming
pretty close.
On
Wednesday,
August 24, when President Joe Biden signed the Student Loan Forgiveness
Act,
making it the most comprehensive loan forgiveness initiative of its
kind, he made history. In keeping with his campaign promise to provide
targeted
student debt relief to working and middle class families, some 1.6
million borrowers have already benefited from the program, with
approximately 45 million
more getting ready to go through the process. President Biden also
announced that Covid student loan deferment, set to end in October, has
been
extended, and repayments will not begin again until after December 31,
2022.
The Student Loan Forgiveness Act will provide up to $20,000
in debt cancellation to Pell Grant recipients
and up to $10,000 in debt cancellation to non-Pell Grant recipients.
Borrowers who earn less than $125,000 per year, or households earning
less than $250,000, are eligible for debt cancellation.
The
Act makes the student loan system more manageable for current and
future borrowers by cutting monthly payments in half for undergraduate
loans; and holding schools accountable when they hike up prices.These
actions will help borrowers who need it most – with nearly 90% of
relief dollars going to borrowers earning less than $75,000 per
year.
Under President Biden’s proposed changes to income-based repayment, the
average borrower will save over $1,000 per year on loan payments, and
the typical college borrower will see their
loan payments cut in half. More information will be available to
borrowers in the coming weeks to
find out whether they qualify for debt cancellation and more details on
the proposed revamp to the repayment program. And, yes, they will make a real difference for current and future
students.
To stay informed, go to http://studentaid.gov to sign up to be notified automatically when this information is available.
To
give a better perspective on the impact of this epochmaking Student
Loan Forgiveness Act, Lodriguez
Murray, Senior Vice President of United Negro College Fun (UNCF).
Murray who was the first in his family to attend college as well as the
first in his family to graduate from high school, attended Morehouse
College, an HBCU that is famous for such luminaries as Rev. Dr. Martin
Luther King, Jr.; actor Samuel L. Jackson, and so many others, is a
genius in his own right, having risen in the ranks of the United Negro
College Fund to the level of Senior Vice President in two short years!!!
He is living proof of how essential and transformational a quality
college education is. He enthusiastically and graciously took
time out of his busy schedule to give an analysis as to why the loan
forgiveness will make a major difference in the lives of post graduate
students:
 |
| LODRIGUEZ MURRAY, SVP UNITED NEGRO COLLEGE FUND (UNCF) |
"This
is a big deal!! Not just because of the debt being forgiven; it's
also a big deal because, this is the first time - and I've been watching
Presidents for quite some time - and this is the first time that I can
remember a presidential action taking equity into account at this
level. So you have individuals who qualify - earning less than $125K, and
a family/couple earning less than $250K - able to get $10,000 removed
from their balance sheet. But, in addition to that, you find a
president and a vice president are applying a balm to misery. They are
giving those who need the most relief the most help. And that is the
most positive thing that I can think about in terms of this
announcement."
Mr. Murray's praise and
analysis of President Biden's strategy continued, "So you have those who
were Pell Grant eligible now able to get $20K - double the level of
relief. And it shows equity; it shows understanding your population; it
shows the old American adage that a rising tide lifts all boats has
never really been true. Because when the tides so often in this country
have risen, we, as a people, often are on ships that have been grounded.
Now, you're giving an equity lens to this and allowed - tried to give
those folks who have never really had an opportunity to float, tried to
give them a chance to sail out on the ocean of the American dream. It
really is something to stop and be grateful for."
Having
come through college prior to Pell Grants, when the most financial
available were National Direct Student Loans, and College work Study
(started under President Lyndon Baines Johnson, as part of his GREAT
SOCIETY AGENDA), I
was curious as to whether or not these options were still available to
today's
college student, as opposed to going into heavy debt. You
don't hear too much about it as an opportunity. Murray, who attended
Morehouse, affirmed that he personally was able to take advantage of
College Work Study
(CWS) as a means for financing his collegiate expenses: "Work Study is
alive and well. I do public policy; I do government affairs; I watch
these programs; I make sure that Congress knows that they have to fund
them on an annual basis. Work study is one of the programs that grows
on a modest level on an annual basis, so I keep an eye on it. I know
it's in existence."
While
there is much
rejoicing about the Biden/Harris College Loan Forgiveness Program, I am
also getting mixed reviews - good and bad commentaries. The other
side of the jubilation goes something like this: The $10K reduction is
not enough. They think Biden should start with at least $50K, because
there are students - and I know a few of them first hand - who are in
debt up to $100K, and haven't even gone to advanced or graduate
studies yet. Daily Kos, a progressive publication, and National Action
Network (NAN) state that $20,000 repayment should be the floor, and
not the ceiling of the debt repayment program. Daily Kos is circulating
a petition to have the amount
expanded. While all this may be valid, and may become available down
the line, it still makes sense to take full advantage of the
current opportunity and apply for the Loan Forgiveness program as soon
as
possible.
Of
course, politically speaking, the Republicans don't like it at all -
despite the fact that most, if not all of them benefited fro taking
advantage of these same programs. Others had the advantage of being
born with the proverbial silver spoon legacy, and never needed any
financial assistance beyond their parent's pockets. Of course, many of
our current senators attended college when tuition was less than $2,000
per year and absolutely have no clue how much it costs to successfully
complete a four year college program, let alone go for higher degrees.
"There's
a very real prospect
in our community that here may be an increase in the amount of
financial forgiveness. And it is because of the pervasive financial and
systemic concerns that we, as a people, have. You can talk about
college being overpriced - and that is a conversation we can have. But,
the debt load that people are taking on is astronomical! And the
action that the President took was directly aimed at stemming some of
that. Now, when you say "why not more," the finances are coming off the
balance sheets of actual individual Americans. However, they are not
coming off the balance sheet of the federal government. And so the
federal government is taking on that burden, so as to clear that burden
up - either partially or for some people, completely - to clear that
burden up for individuals. So that would be - you would start to go
from billions of debt going on to the federal sheets, to trillions -
when you start talking about all debt; or the $50K etc. But there are
tens and tens of millions that are being positively impacted by the
decision the way the President did lay it out. And then he did what we
asked him to do, which is look through a lens of equity and consider
having those that need relief the most to be the first at the table, and
get the largest slice. And having done that - knowing that he is
looking at those who need the most are getting two times the relief of
others - that's just not something that we can walk away from; and is
something that we absolutely have to support because we know the debt
load of our students. I'll give you an
example: The average student at an HBCU is saddled with an annual debt
load - or a gap - of over $18K a year. And that means that if they're
Pell Grant eligible, the President's Plan is going to clear up well over
one year of accumulated debt. That's not something you scoff at."
I'm absolutely
of the mind that every little bit helps - and that you can
actually build on it, once you start it; and if you don't start it, you
have nothing to work with. And this student loan debt reduction is
certainly something that has been bandied about - and I'm glad to see it
finally taking place. When I was at Lincoln University (PA) in the
60s President Johnson started a program to relieve
student loan debt, whereby those who worked in public or community
service positions could actually have their student loan debt reduced by
10% per year up to 10 years. That seemed to work, and was a great
incentive for more people coming out of college to get involved in
public service careers (including yours truly). It appeared to be
doing very well - but
somewhere around the late 70s/early 80s, it seemed to have disappeared.
A lot of
people who had been relying on that, and who had been complying with it
all of a sudden found themselves high and dry just like these kids are
now. Those in my age bracket suddenly started having outstanding
student loans being deducted from their social security, even though
they had completed their ten-year commitment to work in community based
non-profit companies.
"I'm glad you brought that up because part of the announcement
that the President made yesterday, he also extended a program called
the Public Service Loan Forgiveness. So this is a program that had
existed prior to the Biden/Harris Administration, but it was administered
terribly. So, if you are a teacher - if you work at a non profit - any
kind of non profit, you're a police officer, a firefighter - if you
are in the public sphere - you're supposed to be able to apply to that
program and get part, or all of your loan forgiven. That program was
run so poorly; it was so burdensome; it was so onerous; it was so hard
to navigate that hardly anybody on an annual basis was making their way
through the program. Now with the President and Vice President coming
into office, they revamped that program, and extended a waiver and
allowed more people to get into that program; and to get more actions
taken on their loans. And that has helped a lot of people; in addition
to the forgiveness that's going on."
"So now what
you have are these multiple avenues to impact this one problem. And
that's what it's going to take. Now the challenge is to make the
population aware of all of these tools in their toolkit, because they
have to meet people where they are. You know some people are reading
newspapers, some are reading the news on the internet; some are getting
their news from social media. We have to figure out a way to reach
people where they are and make sure they get the relief for which they
are eligible, so that their futures can be brighter; and so that our
motto at UNCF: 'A mind is a terrible thing to waste,' really comes to
fruition. We also believe that you should not have to give up your
dreams of financial stability for higher education."
Not
only have student loans become so pernicious, but most students don't
realize how much they impact their American dream of home ownership -
the loans have become such a pervasive factor in every level of their
credit. Real estate loans are denied since student loans can prevent
you from qualifying for a mortgage.
"Yes
indeed. As students have taken on more of the debt load, that has been
more of a problem. In addition, I mentioned earlier that UNCF is a
significant scholarship provider. And so our encouragement is for every
student - every graduate - but for every student when you are choosing a
college - to use that same persistence and creativity that you use for
every other passion of your life - use that to pursue the grants and the
scholarships - because the money is out there. UNCF has 400 different
scholarship programs; and we're not the only provider of scholarships.
And so students must take that same passion, creativity, purpose,
determination that they use for everything else and apply it to
financing their education. Debt free - we would be a much better
society - we'd be freer of the confines that financially shackle us
now."
Mr.
Murray's recommendation couldn't be more essential and more timely.
There has been a negative shift in the quality of
education in the US, leading to the undermining of quality education
over the last 40+ years.
There's been a step away from quality - brought on by a regime change.
There's also been a
step away from actually augmenting and supporting the necessary basic
and quality education that most Americans have a right to expect - from
kindergarten through college. And therefore college
has bothe been devalued, and at the same time incredibly more
expensive. When I was
struggling to put my three through college - I actually had someone tell
me "Well Ms. Wilson you can
either choose to put them through school, or choose not to have a place
to live!" I looked at them like they were crazy. I came from a family
where a college education was a non negotiable item, and I, like you,
left no stone unturned to support them - including moving into a less
expensive apartment. However, it was during a time when Pell Grants,
NDSL and other options had been reduced, or practically non-existent.
Thank goodness I'm seeing a return to the
concept that education is essential under the Biden/Harris
Administration. However, institutions that
used to afford students to get a free education - like City University
of New York (CUNY), and Berkley in California no longer provide those
options. Murray however doubts programs like those (tuition free college) will ever be re-established - and may be gone forever.
Mr.
Murray had some words of wisdom to impart for all college students, and
those seeking to enhance their education or skills through specialized
training: "I'm not sure that there will be a return to free and open colleges. That's why the onus is on the student
to take their own education in their hands. And I don't just mean the
books that you read and how strong you approach your ability to learn; I
also mean taking your financial relationship with your educational
institute completely in your own hands. Apply for as many scholarships
as possible; going after grants, financing your own education to the
best of your ability because that frees you up to make other purchases.
That frees you up to use your finances for other things. Frees you up
for home purchasing. Frees you up to be able to dabble in real estate.
You are able to actually pursue your own dreams and your own whims when
your financial education is in your hands. And so my encouragement,
and is to do your best to take on as few - or maybe even no loans as
possible; so that you're not limited by anything except your own
imagination.
Another concern is for students who have become prey
to predatory lenders like Sallie MAE, or those that have turned out to be so
pernicious that they might just as well hook up with the local corner
loan shark. There are others who students thought were
going to help them finance their education, only to find out that they
are in a swamp of trouble. Do any of them qualify for any of the loan
forgiveness packages that are being offered?
"Sally
MAE, and those kinds of predatory lenders, all qualify under this program. Additionally, students who attended for-profit universities, such as
DeVry, etc., that have not been worth anything. And what you find is
that this President and Vice President, through the department of
education, have discharged the debts of those who went to these defunct
predatory for-profit institutions. And so all of us - all of us in our
communities have to be more vigilant. There are still so many that are
like myself, who are first generation college students. And so you
can't blame a student for thinking that all colleges are the same. But
many of the for profits don't provide the same level of quality
education as the not for profits. And so it's up to all of us in the
community to make sure that our students are getting access to quality
education; and the institutions that we all know, love and we've seen
persist prior to the civil war til now - institutions whose names you
know - like Morehouse, Spelman, and Xavier (and LINCOLN U, PA), and
there may be institutions that are not household names like Texas
College, Taledaga, and Tougaloo - but they are standard, strong,
persistent non profit colleges and universities that make a difference
in the lives of regular citizens and turn the progeny of slave into
world changers."
That sounds like a wonderful motivational slogan: "Turning the progeny of slaves into world changers."
Are you going to develop some in-service training programs at the
high school junior or senior
level, prior to their going into school? Training them to start looking
at the financing
well before they actually select whatever school they choose to attend.
It might also be a great opportunity to help parents identify grants
and other funding resources, while their children are young, so they
will be well prepared by the time they reach college age. Parents used
to set aside funds on an ongoing basis; but college tuition has
exponentially increased so much, that it might be well to make it a
family team effort. Students entering their first year of college can
also learn to monitor their aid while they're matriculating. A
good in service can educate them to the fact that these
are options and opportunities for them.
"Sure,
we believe students should be counseled prior to taking on a debt load,
but, in the interim, while that program is being developed, they should
sign up at https://studentaid.gov
to be notified automatically when this information is available.
Today’s actions build on the steps that the Biden-Harris Administration
has already taken to provide over $32 billion in loan relief to 1.6
million borrowers. That includes making temporary changes to the Public Service Loan
Forgiveness program so more public service workers can get their debt
cancelled after 10 years of service.
Individuals can apply right now – until October 31st - to take advantage of these temporary changes to the PSLF program. Visit PSLF.gov for more information."
Mr. Murray concluded by recommending the following: In
the coming weeks, the Administration will release more information on
how to see if you qualify and how to sign up to receive more information
about these changes. Become pro-active
about successfully paying off your debts. Don't take a wait and see
attitude. Learn all you can about your eligibility. Go to http://studentaid.gov to sign up to be notified automatically when this information is available.
I
couldn't agree more - which is why I'm taking the time to post this
comprehensive overview about the POTUS' STUDENT LOAN FORGIVENESS ACT -
So now it's up to you to share it with your students, your children,
your college counselors and financial aid departments. Don't be on the
late show about this. I'm also including FAQs that might for additional
information:
FAQs regarding the President's College Debt Relief Program:
Why $10K of relief – why not more? And why only for individuals making less than $125K and households making less than $250K?
- Today’s actions advance the President’s vision of growing our economy from the bottom up and the middle out.
- It provides up to $20K in relief to Pell Grant recipients and up to $10K of relief to other borrowers – wiping away the full debt of 20 million people.
- We expect up to 43 million federal student loan borrowers to receive forgiveness, with the most relief reaching borrowers who need it the most.
- Eligible borrowers – those earning less than $125K annually or a household earning less than $250K - are most at risk of financial harm once the payment pause ends.
- That’s why today’s actions are focused on all these borrowers.
How will a borrower know if they qualify for student loan forgiveness?
- Borrowers who earned below $125K annually and households earning less than $250K will qualify for $10K in federal student debt relief.
- Pell Grant recipients under those same income thresholds will qualify for $20K of federal student debt relief.
Are current students eligible for relief?
- Yes, current students with loans are eligible for relief. Loans must have been originated prior to July 1, 2022.
- Dependent students who were enrolled in school during the last award year qualify if their parents’ household income was under $250,000.
Isn’t this unfair to all those borrowers who paid down their debt, making sacrifices along the way?
- President Biden believes that a post-high school education should be a ticket to the middle class. But for too many people, the cost of college has skyrocketed and student loans remain a lifelong burden.
- Today’s actions will give more breathing room to America’s working families as they continue to recover from the strains associated with the COVID-19 pandemic by providing targeted debt relief to those who need it most and making the student loan system more manageable in the future.
- The fact that some students in that situation were able to pay off their debt is a testament to them, but it is no reason to deny relief to others.
- And the American people agree – according to a recent survey, more than half of people who paid off their student loans support debt relief for other borrowers.
- No. No individual earning more than $125,000 will see their debt cancelled.
- Nearly 90% of debt relief will go to individuals making under $75,000 per year
- President Biden is committed to building our economy from the bottom up and the middle out – today’s actions will provide critical breathing room for middle class families as they continue to recover from the impacts of the pandemic.
What is “Income Driven Repayment” and what are the changes the Administration announced?
- In addition to announcing targeted debt relief for middle class families, the President announced proposed changes to make the student loan system more manageable for current and future borrowers.
- Currently, there are several repayment plans where borrowers can make monthly payments based on their income level, and if they pay for 20 years, the remaining debt is cancelled.
- But there are too many plans and even the most generous plans leave borrowers with too high a payment.
- The Administration is proposing changes that cap the amount that borrowers would pay monthly for undergraduate loans at 5% of their income.
- These changes will be transformative for current and future borrowers. The typical borrower will pay $1,000 a year less. Undergraduate borrowers will see their monthly payments cut in HALF.
- Here’s one example -- under this proposal, a typical nurse with an undergraduate loan making $77K per year, married with two kids, would pay only $61 per month compared to $295 per month under the current income-driven repayment plan.
What does a borrower need to do to receive forgiveness?
- The Department of Education will release more information in the coming weeks about how borrowers can sign up to receive debt relief.
- Some borrowers may be eligible to receive relief automatically because the Department already has access to information about their income during the pandemic.
- But other borrowers may have to fill out a very short form.
- Go to studentaid.gov to sign up to be notified automatically when this information is available.
How many borrowers will this impact?
- We project that up to roughly 43 million federal student loan borrowers (or 95% of all federal student loan borrowers) will be eligible to receive loan forgiveness and, of those, 20 million are eligible to have their debt completely cancelled.
- That’s assuming all those who are eligible for relief take steps to get it.
- Borrowers in the top 5% of incomes will not be eligible for relief, and nearly 90% of relief dollars will go to those making under $75,000 a year.
Won’t college just raise tuition now, knowing that taxpayers will end up shouldering the burden for bigger loans?
- The President believes strongly in imposing accountability on college raising costs without delivering additional value to students
-
Already, his Administration has taken steps to increase accountability, including:
- Reinstating an enforcement office at the Education Department
- Terminating a college accreditor that had previously allowed colleges that defrauded borrowers, like ITT and Corinthian, to gain accreditation and get access to federal student loans
- Beyond that, the Department announced today they would be creating a list of programs that are the worst performers at delivering value for their costs, so that students can make informed decisions on where to go to school.
How will this impact inflation?
- Because we are restarting payments in addition to providing targeted debt relief at roughly the same time, we believe that any inflationary impacts from debt relief will largely be offset by the deflationary impact of restart.
- With different, less conservative, assumptions, the impact could well be neutral or deflationary.
What about income-driven repayment? Given its generosity, doesn’t that also add significant extra spending to the mix?
- The new IDR plan will likely take longer to implement than forgiveness.
- When implemented, the new plan will save borrowers who sign up money relative to what they would be paying on other income-based repayment plans.
- But because we cannot reliably estimate take-up of IDR at this point, we can’t comment on its impact, one way or the other.
How much will this debt cancellation cost?
- What the President announced is a restart of student loan payments, alongside targeted debt relief. In the short term, the impact of the restart will offset the cost of the targeted debt relief.
- In the long term, the fiscal impact of the debt cancellation will be affected by a number of factors, including how many borrowers will take advantage of this relief and the economic benefits that can occur as a result of the targeted debt cancellation. For example, debt relief can lead to more Americans having opportunities to create small businesses, helping grow our economy.
- Ultimately, we won’t have an estimate of the cost of this until the program is implemented.
PS: Hopefully this information and the previous interview have been helpful
Please feel free to let me know if you have had success in getting some or all of your financial debt cleared up:
Email me at: eclecticallyblacknews@gmail.com
NOW THAT YOU KNOW
WHAT ARE YOU GOING TO DO ABOUT IT?
Stay Blessed &
ECLECTICALLY BLACK
 |
| Gloria DULAN-Wilson |
