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A $100,000 Price Tag: A Michigan Social Work Student Votes to have Financial Freedom

MICHIGAN—She’s studious. Ambitious. Always prepared for what’s next, and even the unexpected—especially with two children under three years old in tow plus two older stepdaughters. That’s how 32-year-old Oak Park resident Jessica McCall was able to obtain her master’s degree in the spring of 2016 in social work at Wayne State University. And now she is looking to be certified as a social worker and continue on in her career path. But her student loans are no joke.

“In earning my bachelor’s and master’s degree and having to fund it myself, I currently have about $100,000 in student loan debt,” McCall said. “Due to my current financial situation I have been able to temporarily defer payments of my student loans. But in the past, I have been on an [income-based repayment] plan. 

For McCall, an active wife and mother, student loan forgiveness could be the difference between her having financial freedom and being in debt for a large portion of her life. 

More than ever, Michiganders like McCall are considering the cost of their education when hitting the polls this year. 

Under presidential nominee Joe Biden’s presidential plan, student loan forgiveness comes in strong for Americans. 

His plan has been touted among college students and graduates for offering several solutions, including:

  • $10,000 in loan forgiveness 
  • Stopping payments for people earning less than $25,000
  • Changing the income-driven repayment plans to no more than 5% of discretionary income (down from 10% now)
  • Automatic loan forgiveness at 20 years (which is on-par with most income-driven repayment plans now)
  • Improving [Public Service Loan Forgiveness | Federal Student Aid] PSLF by making it forgive $10k per year for up to 5 years and making enrollment automatic

Those changes could drastically reduce the amount of debt incurred from student loans for graduates like McCall.

READ MORE: ‘I’ve Given up Hope’ Says Michigan Woman With $70k in Student Loan Debt 

“Student loan forgiveness under the Biden Administration would offer me financial freedom and would provide a sense of emotional wellbeing with that debt not constantly looming over me,” McCall said. “WIth the extra money that I would save under student loan forgiveness. I would be able to put more money away for savings, and my daughters’ college fund. I would be able to also pay some other debts down more quickly.” 

An Unexpected Turn

Elissa Gonzalez, 35, never anticipated that 2020 would turn out the way it did, the Detroit Free Press reported. Gonzalez thought her goals of developing a career in marketing, public relations, and special events was next on the agenda for the single mother of two. But the former longtime waitress, who went back to school to get a degree and graduated from the University of Michigan-Dearborn in December 2019, and lost her internship when the pandemic hit. She is living with her sister to save on bills, the article reported.

Gonzalez told the publication that she is looking forward to making some extra money when she begins working on Oct. 22 at $15 an hour at the Amazon warehouse in Romulus.

And she’s grateful, the article states, that the coronavirus relief effort included a temporary hold on payments — and a temporary 0% rate —  on her $40,000 in federal student loan debt, which ends in January. 

Calculating The Numbers

Robert Farrington, founder of The College Investor, said that Biden’s plan primarily “makes sense” and the $10,000 is “a nice goal.”

A Georgetown University report finds Biden’s free public college plan would pay for itself within 10 years, a CNBC article stated. According to an analysis by the Georgetown University Center on Education and the Workforce, the policy, inclusive of the proposal for tuition-free community college, would pay for itself within 10 years. 

Researchers estimate, the CNBC article stated, that Biden’s college plan would cost $49.6 billion (roughly $8.6 billion less than it would cost if the plan did not have the $125,000 income limit) during the first year. Also, the benefits of the plan would “outweigh the costs due to an increase in earnings and tax revenue within 10 years.”

“The team at Georgetown estimates that after 11 years, the Biden initiative would cost $73 billion per year, but would be completely offset by the associated increase in tax revenue to a whopping $186.8 billion as workers earn more due to their advanced education and training,” the article stated.

The other key points of Biden’s plan make sense,” he told The ‘Gander. “If you don’t earn much money, having a pause until you do is a good benefit for borrowers, and it helps get loans back into repayment when the borrower is able to pay. If something tragic happens, and the borrower can’t pay, there are options for them.”

Farrington added that changing the income-driven repayment calculation to 5% will “definitely help” some borrowers who’ve been struggling, and could see borrowers’ payments with income-driven repayment plans cut in half. 

He added that currently about 45% of federal loan borrowers are on an income-driven repayment

“Also, to qualify for PSLF, you must be on an income-driven repayment plan,” Farrington said. “Finally, improving PSLF is a great step in the right direction. PSLF have been mired with issues in terms of who qualifies and who doesn’t. Furthermore, having partial forgiveness along the way is a positive benefit. I would like to see more structural changes to the program implemented: such as making all loan types qualify (not just Direct Loans), and make all repayment plans qualify. These two details, loan types and repayment plans, have caused a lot of the issues with borrowers thinking they qualify, only to find out they’ve been rejected. It would be an easy improvement to the program.

“I think Biden has some good plans for reducing the cost of college (even proposing some free college), and that needs to be addressed before, or at the same time, as student loan reform. Not doing so will simply band-aid the problem and have it grow back in a few years,” he said.

A Better Financial Forecast

Biden’s plan would forgive all undergraduate tuition-related federal student debt for borrowers who earn up to $125,000 a year and who attended community college or four-year public colleges and universities, according to Inside Higher Ed. 

“The federal government would cover monthly payments for borrowers until the forgivable amount was paid off under his proposal, which would apply to borrowers who attended private HBCUs or minority-serving institutions,” the artic mi le read.

Biden also links forgiving student debt to dealing with racial inequities in the country, Inside higher Ed published.

During a virtual convention of the American Federation of Teachers, Biden was asked by Marguerite Ruff, a Philadelphia classroom assistant for special needs children, what he planned to do to reduce disparities, the article read. Biden said that his campaign pledged to eliminate large portions of student debt. 

“We still have Black college graduates five times more likely than white graduates to have to default on their student loans because of their financial circumstances,” Biden said in the article. “There are simple things we can do”  to address racial disparities, he said of his plan. “It’s not like we turn on the faucet and spend government money. It will increase the income in the pockets of people making a decent wage growing the economy.”

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.

SEE ALSO: This Small Michigan College Landed Almost $20 Million During the Pandemic. Others Weren’t So Lucky.