By 2015, Lauren Quinn had borrowed $49,996 in federal student loans to pursue a master’s degree in education at UCLA. But after almost five years of making monthly repayments tied to her income level, she is confronted with a total balance of $56, – about $6,500 more than the original amount due to compounding interest.
“It’s just another day older, deeper in debt is how I feel,” said Quinn, a public high school teacher in Los Angeles. “It just feels like quicksand. It feels like this huge thing I’ll never get out from under.”
She has paid a total of $9, since 2016, but only $ of that has been applied to her principal balance.
Quinn is among the 42.9 million Americans who had federal student loans as of last year, according to the National Student Loan Data System. Meanwhile, Federal Reserve Board statistics show outstanding student loans overall have Eugene payday loan and cash advance swelled to $1.7 trillion, surpassing the nation’s auto loans and credit card debt.
Seth Frotman, executive director of the non-profit advocacy group Student Borrower Protection Center, characterized the current state of student loans as a “quiet crisis.”
“Maybe unlike the mortgage crisis where you could see down the street there used to be a house owned by your neighbor that’s now owned by the bank, there isn’t this visual, tangible thing you could see when your neighbor defaults on a loan or your neighbor’s struggling to save for retirement because their student loan bill just never seems to go away. And I think that has also hampered our ability as a country to actually tackle both the root causes of this crisis and the fallout it’s had on American families,” Frotman said.
Student debt “feels like quicksand.” Is loan forgiveness the answer?
Jeremy Porter said he worries about being able to afford a house and kids due to the burden of student loan debt. CBS News
Porter originally took out $21,900 in federal student loans to attend Delta State University in Mississippi. But now over seven years later, his total balance has grown to $30,. He did not complete his undergraduate program, but through the national workforce development program Year Up, Porter was able to connect with an internship in Virginia and eventually rise up the ranks to become a senior telecommunications officer at the same company.
“A lot of times I’ve had to defer just because it’s either make these payments or pay my rent. And of course you have to have a roof over your head,” Porter said.
The push to forgive student debt
Democratic lawmakers including Senator Chuck Schumer, Senator Elizabeth Warren and Representative Ayanna Pressley, among others, have called on President Biden to forgive $50,000 in federal student loans by executive action, citing research showing such cancellation would help close the racial wealth gap and stimulate the economy , especially during the COVID-19 pandemic. Mr. Biden has indicated he favors a $10,000 debt cancellation through legislation.
Princeton sociology professor Frederick Wherry and Charlie Eaton, an assistant professor of sociology at UC Merced, helped draft an open letter asking Mr. Biden to “right a series of wrongs” by using executive action to cancel student debt. More than 1,100 other academics who study higher education, student debt, and racial inequality signed on.
“Part of this is just recognizing the humanity of debtors, recognizing that they had ambitions when they took out those debts to go to college , and asking ourselves what would happen if they got a fresh start,” said Wherry, who is also the director of the Dignity and Debt Network.
“If we want to right the wrongs of the student loan problem… one of the ways to right that wrong is to say, ‘Sorry, we messed up,'” Wherry said. “This would be a moment for the federal government, President Biden, to say, ‘We had a great idea. It started out with the best of intentions, and it went off the rails. So because we messed up, it is time for us not only to ask for forgiveness, but to extend forgiveness.”‘