05/27/2021

Student debt: Personal stories and national solutions

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The personal impact of the student debt crisis came to light at the AFT’s town hall May 25, with two members sharing how this national crisis has limited their lives’ trajectory, and how the solutions offered by leading policymakers could make all the difference for them.

student debt town hall zoom

While New York City middle school counselor Darimir Perez and Los Angeles adjunct professor and physician assistant Jessica Saint-Paul described dreams deferred and disappointing revelations about payment delays, AFT President Randi Weingarten, Sen. Elizabeth Warren and NAACP President Derrick Johnson promoted a solution: the campaign to cancel $50,000 of student debt for anyone who needs it.

The proposal, led by Warren and Sen. Chuck Schumer and supported by the AFT, the NAACP and thousands of advocates, would eliminate student debt for 84 percent of those who have it. It could be implemented by President Joe Biden, who has the power to sign off on federal loan relief; no action by Congress would be needed.

The panel also agreed that the Public Service Loan Forgiveness program is invaluable but in dire need of repair.

Student debt today

First, the panel painted the current landscape. For Perez, that has meant sacrifice.

Shortly after she and her family immigrated to the United States from the Dominican Republic, her father died. Her older sister dropped out of college to support the family, and because of her sacrifice Perez was able to attend college and become a paraprofessional in the public schools. When she saw the need for bilingual counselors, she took out $50,000 in student loans to get her master’s degree in counseling, sure that loan forgiveness programs would help her pay it off.

But loan servicers misled Perez, and 10 years later she still owes $35,000. Perez has had to put her dreams on hold.

“I had always wanted to have three kids, to buy a house in a peaceful area, to enroll my twins in all the extracurricular activities they were interested in, and to have the choice to not take on extra work so I could spend more time with my family, but those things were not an option with my loans,” she said.

Perez is no anomaly: Her co-worker’s sister dropped out of college to make ends meet and support her children. A colleague dropped out to support younger siblings. A friend dropped out due to domestic violence, yet she has to continue her student loan payments—with no degree. Perez’s own children are transferring to a more affordable school, giving up their dream education because she cannot afford the “astronomical fees” for college.

‘Dis-service’ from loan servicers

Loan relief programs also failed Saint-Paul. As a longtime worker in the public sector, she felt sure the Public Service Loan Forgiveness program would serve her; the program cancels all federal student loan debt for people who work in public service, after 10 years of payments.

But in an AFT student debt clinic, Saint-Paul realized that none of her loans qualified for PSLF, and after eight years of payments she would have to start all over again. “I was devastated,” she said.

“I checked and double-checked all the boxes,” she said. “I was assured that student debt forgiveness was right around the corner.” But her loan servicer misled her. “The student loan system is fundamentally broken,” said Saint-Paul.

Saint-Paul, who is Black and Haitian American, also notes that student debt disproportionately harms Black and Latinx people. “Everyone, absolutely everyone, should have equal access to a quality education so they can focus on their mission to serve, rather than choosing a higher paying job just so they can pay their student debt,” said Saint-Paul. “We were promised [loan] forgiveness, we’ve done our part, and the system failed us.”

The big picture

Weingarten noted that this time of year, graduation season, is a time for planning the future, but that future is dampened by crushing student debt. Some 45 million people carry an average $35,000 in student debt, and the national total is $1.7 trillion.

“We are not doing what we need to do to help our young people get a healthy start in life,” said Weingarten, who also pointed out the racial disparities when it comes to student debt: Eighty-eight percent of Black teachers have student loans, she said, compared with 76 percent of Hispanic teachers and 73 percent of white teachers.

In the long view, said Warren, 20 years after borrowing money for college, white borrowers still owe 5 percent of the original amount borrowed—not great, but “at least the end is in sight.” At the same point in time, Black borrowers owe 95 percent of the original amount borrowed. More Black borrowers are discriminated against in the workplace, so they wind up in lower paying jobs that make it harder to meet loan payments. Generational wealth is lower among Black families too, so asking parents for help is often not an option.

“This is a racial justice issue,” said Warren.

Student debt relief is a crucial part of the NAACP’s advocacy for economic and racial equity, and student debt is a huge factor in preventing home ownership—“the No. 1 wealth accelerator,” said Johnson. When your debt ratio is “out of whack” because of student loans, you can’t qualify for home mortgage loans. Student debt become “that luggage you’ve got to carry with you until you can’t carry it anymore and you are locked out of buying a home.”

The panel agreed that $50,000 in student debt relief is a primary solution to the student debt crisis, and that fixing the PSLF program is also key. The program’s currently labyrinthine requirements make it difficult, if not impossible, to navigate, and 99 percent of those who have applied for PSLF have been denied.

With Biden in office, said Weingarten, “there’s a real shot that we can get $50,000 in student loan relief and ensure Public Service Loan Forgiveness will work in the future.”

What would that mean for Perez? “It will restore my mental and emotional health and that of my children,” she said. “It will change my life.”

[Virginia Myers]