Student debt is crippling America, especially the essential workers, says East China resident Molly Metheny.
EAST CHINA, MI — Molly Metheny, 31, is fed up.
The East China resident’s had enough with student loan price gouging and the government leaving students like her out of conversations when it comes to loan forgiveness.
“I just know I’ve given up hope on the government investing in it’s people,” Metheny said. “They don’t see us as the future or important. We have to come up with a way on our own.”
This past summer, Republican Senate Majority Leader Mitch McConnell revealed his stimulus proposal in a speech on the Senate floor as a number of the features in the CARES Act were going to expire. What was noticeably missing was the solution for student loan relief, according to Forbes.
The Republican proposal does not extend the suspension of payments on federally-held student loans, according to Forbes. They are also supporting a plan from Senator Lamar Alexander what he says is, “No Income. No Payment,” a one standard repayment plan and one other income-driven repayment plan.
An Unfavorable Proposal
The Trump Administration has taken a harsh view on student loans over the past three years. Last October, Education Secretary Betsy DeVos was held in contempt of court for her refusal to stop collecting student loans that the court ordered forgiven. DeVos also eroded the Public Service Loan Forgiveness program, which gives student debt relief to people entering careers like teaching.
And congressional Republicans have largely followed the lead of Trump and DeVos. The proposed next wave of coronavirus relief not including student debt relief is not an oversight, but an intended statement according to Mark Kantrowitz, a higher education expert.
Many are against this proposal. In a letter to Senate leadership, 56 organizations against this wrote that the “legislation would actually penalize many borrowers and remove important protections, while ignoring the urgent needs for both student loan debt cancellation and, at the very least, extension and expansion of the automatic forbearance period put in place by the CARES Act.”
The organizations wants Congress to extend the student loan suspension for another year instead of adopting Alexander’s proposal. The House passed a bill in May, known as the HEROES Act, that would do just that. That legislation would also provide some targeted loan forgiveness to those borrowers struggling before the pandemic.
The current student loan payment suspension ends next January; an extension of an initial September extension.
Forgive And Forget?
Metheny went to school from 17-22 years old, starting in the fall of 2006 at community college. She then transferred to Western Michigan University and in spring 2012 graduated with a bachelors in Anthropology — and tens of thousands of dollars in student loan debt.
“I worked full time and only took out government loans (thinking they would not be as bad as private) and I worked 32-40 hours a week while in school because my loans only covered classes: no books or living expenses and for two years I had to pay 4,000 a year for classes out of pocket,” she said, adding that in 2012 when she graduated she could not afford to move. “I had $28,000 in loans. I picked the payment plan that was based on what I earned for repayment I paid for four years and owed just under 34,000; 6,000 more than I owed before deferring by the end of 2016.”
Now, Metheny is in her second year of nursing and she accrued $70,000 in student loans. She hasn’t paid on her student loans since 2016 because she could not afford rent, car insurance, car payment, smaller bills like phone, water, electricity, internet and medical bills.
“I accrued almost 10,000 more in interest in four years. I graduate in May of 2021,” she said, adding that she feels the solution to all this is simple: forgive.
Land of The Free, Home of The Debt
Politico estimates that 40 million Americans, covered by the suspension of payments during the coronavirus, face a dramatic student loan cliff when the temporary pandemic-based suspension of student loan repayment ends, especially amid an economy still struggling to recover from the crippling blow caused by the pandemic.
That means 40 million Molly Methernys, each struggling with the burden of tens of thousands in debt during an economic downturn unmatched since the Great Depression.
“We seem to be dealing in this fictional universe where Covid is getting better and not worse, and unemployment is getting better and not worse,” Whitney Barkley-Denney, a senior policy counsel who works on student debt issues at the Center for Responsible Lending, told Politico.
Robert Farrington founder, The College Investor, said that while he’d love to see more programs that help students, there are still good options today.
“First, it’s important to note that for all Federally-held student loans (which include nearly all Federal loans originated after 2009), there are no payments required until January 2021, and interest is set to 0% through Dec. 31. That’s amazing,” he said, adding that without any changes to existing legislation, about 50% of student loan borrowers qualify for some type of loan forgiveness.
“The most popular program right now is Public Service Loan Forgiveness, but a lot of borrowers should also know that if you’re on an income-driven repayment plan, you also get loan forgiveness at the end,” he said.
Also, Farrington said that many borrowers could qualify for $0 monthly payments right now, if their income has dropped low enough due to the pandemic. This is through income-driven repayment. These plans cap your monthly payment at 10% or 15% of your monthly discretionary income.
Find out more about loan forgiveness programs.