Student loan repayments begin again, but who actually has to pay?
[link removed]
CounterCurrent:
Just Can't Debt Enough
Student loan repayments begin again, but who actually has to pay?
CounterCurrent is the National Association of Scholars’ weekly newsletter, bringing you the biggest issues in academia and our responses to them.
[link removed]
Category: College Finances, Student Loans;
Reading Time: ~3 minutes
------------------------------------------------------------
** Featured Article: Lessons from the Student Loan Payment Pause ([link removed])
------------------------------------------------------------
After my brief hiatus on maternity leave, it’s wonderful to be back to writing for CounterCurrent. School is back in session, fall has arrived, and yet again, the student loan repayment controversy is at the top of the news cycle. As of Sunday, borrowers are officially required to make payments after a three-year pause on student loan repayments. This comes after the Supreme Court struck down ([link removed]) the Biden administration’s student loan forgiveness plan this summer.
As you may remember, the initial pause on student loans was intended to help borrowers land on their feet due to the economic turmoil and job instability of the COVID-19 pandemic. This reprieve was only meant to last for two months, but through political meddling and constant renewals (under both Trump and Biden), the program was extended until October of this year. Now more than 28 million borrowers have to pay up.
However, some borrowers will have some wiggle room as far as payments through September of next year. The government created a temporary on-ramp period ([link removed]) such that “if any borrowers miss a payment before then, they won’t be reported as delinquent to credit agencies—but interest will still accrue, and credit score companies can still factor in the missed or late payments.” Also, President Biden is recommending that borrowers apply ([link removed]) for his new Saving on a Valuable Education (SAVE) Plan, launched in August of this year, that “calculates payments using a borrower’s income and family size rather than their loan balance.” Some borrowers are happy
with the administration's plan for easing back into repayments ([link removed]) . But skipped loan payments will still accrue interest, which exacerbates the problems of poor credit and increased debts—a rather nasty, perpetuating cycle.
The ongoing politicization of this issue leaves us valuable lessons to be gleaned from the student loan forgiveness fiasco, suggests Andrew Gillen in his recent article ([link removed]) on Minding the Campus. First is that by delaying student loan repayments, borrowers just took on more non-student loan debts (i.e., worsening their overall financial circumstances). Second, though the student loan forgiveness plan was a “noble effort” to begin with, it was seized upon by both sides of the aisle to further political agendas, costing taxpayers billions. Gillen explains ([link removed]) ,
Accounting for the cost of this additional time, the Penn Wharton Budget Model estimates ([link removed]) the total cost at $210 billion, and the American Enterprise Institute’s Nat Malkus estimates ([link removed]) a total cost of just under $240 billion for the program …
In retrospect, the student loan payment pause was a huge and costly mistake. While the initial pause may have been appropriate, it should have been clear that the pause would be extended for political reasons when an election was close, and for ideological reasons if progressives won the election. This predictable political hijacking of a decent policy is why we can’t have nice things.
Gillen is right—to protect well-meaning and good future policies from politically convenient hijacking, we must expect such an outcome and station safeguards within such legislation or regulatory action. As we watch this tangled mess unfold, one has to wonder if higher education policymakers will finally learn the hard lesson: that through-the-roof tuition sustained by government interference doesn’t help students or taxpayers in the long run. Until then, we’re left with an ever-growing mountain of debt and questions about who actually has to pay up.
Be sure to read Gillen's full article on Minding the Campus ([link removed]) .
Until next week.
Kali Jerrard
Communications Associate
National Association of Scholars
Read the Article ([link removed])
For more on student loans, government, and issues in higher education:
[link removed]
September 27, 2023
** Actions Matter: The IAT’s Fallacious Arguments ([link removed])
------------------------------------------------------------
John Staddon
People, and groups, are not all the same. “Equal opportunity” does not mean (as Banaji & Dobbin seem to believe) proportionately equal group results.
[link removed]
September 16, 2023
** Report: Diversity Statement, Then Dossier ([link removed])
------------------------------------------------------------
John D. Sailer
In this report, we seek to explain the phenomenon of DEI cluster hiring, demonstrate its widespread practice throughout academia, and highlight the dangers of the practice.
[link removed]
July 3, 2023
** SCOTUS’s Loan Forgiveness Ruling and the Path Forward ([link removed])
------------------------------------------------------------
Andrew Gillen
The combination of federal government lending and the progressive crusade to forgive all that debt is like being forced to play Russian roulette over and over again ... the only long-term solution to this problem is to get the government out of the business of making student loans.
** About the NAS
------------------------------------------------------------
The National Association of Scholars, founded in 1987, emboldens reasoned scholarship and propels civil debate. We’re the leading organization of scholars and citizens committed to higher education as the catalyst of American freedom.
============================================================
Follow NAS on social media.
** Facebook ([link removed])
** Twitter ([link removed])
** YouTube ([link removed])
** Website ([link removed])
** Donate ([link removed])
| ** Join ([link removed])
| ** Renew ([link removed])
| ** Bookstore ([link removed])
Copyright © 2023 National Association of Scholars, All rights reserved.
You are receiving this email because you opted in via our website, membership or donation forms, contact forms at events, or by signing open letters.
Our mailing address is:
National Association of Scholars
420 Madison Avenue
7th Floor
New York, NY 10017-2418
USA
Want to change how you receive these emails?
You can ** update your preferences ([link removed])
or ** unsubscribe from this list ([link removed])
.
