Stick a fiscal fork in ’em: These student loan debtors are done.
As they contend with a second legal setback to President Biden’s estimated $430 billion student debt cancellation plan, some exasperated borrowers told The Post they won’t ever pay another penny toward their massive tabs — regardless of how it might impact their future finances.
Rather than having up to $20,000 forgiven as Biden vowed in August, the fed-up debtors remain among the more than 45 million borrowers who owe a total of $1.6 trillion in federal student loans. The average undergraduate borrower leaves college with nearly $25,000 in debt, according to a Department of Education review, and payments often start six months out of school when cash can be especially tight. As a result, roughly 16% of all borrowers are currently in default, federal data shows.
Halted at the beginning of the pandemic, monthly loan bills are set to resume in January unless the pause is extended for a ninth time. But current and former students, including one who owes a staggering $118,000, said the looming payments are simply above their pay grades, especially in post-pandemic America.
Arizonan Christina Winton is one of 45 million Americans who owe student debt. Despite outstanding loans totaling nearly $30,000, Winton — like many in her position — is refusing to pay a dollar more.
Some 26 million people applied for the loan relief plan that critics claim could intensify inflation and 16 million had already been approved as of last week, White House press secretary Karine Jean-Pierre told reporters.
Activists say the viability of the proposed debt relief remains unclear: The Department of Education stopped accepting relief applications and the program faces a possible Supreme Court showdown. Debt activists say up to 75% of borrowers won’t resume paying when those invoices arrive.
“These loans have become weaponized, they’re viciously predatory and hyperinflationary,” Alan Collinge, founder of nonprofit group Student Loan Justice, told The Post. “So, they’ve become these licenses to steal [from borrowers].”
Collinge, 52, said the student loan system is helplessly trapped in a “death spiral” with total freefall coming in months; he noted that nearly 60% of borrowers were not paying off their loans as of last 2019, prior to the coronavirus pandemic.
Pres. Biden campaigned on student debt reform and is battling to keep his debt relief plan alive after it was blocked by an appeals court earlier this week.
President Biden first floated debt relief during the 2020 presidential campaign. As president, he has the legal authority to wipe out up to $50,000 in debt for federal borrowers under the Higher Education Act of 1965, according to Collins and other relief supporters, including Sens. Elizabeth Warren and Chuck Schumer.
Betsy Mayotte, founder of the Institute of Student Loan Advisors, said the recent rulings blocking Biden’s proposal leaves millions of Americans in limbo.
“Borrowers are confused and frustrated by what’s going on with the court proceedings, especially as we come up to the payment restart,” Mayotte told The Post.
Four distraught debtors, meanwhile, told The Post they’ll become student loan scofflaws amid widespread uncertainty and growing calls for Biden to extend the payment pause yet again.
* Article from: The Washington Post