A Democratic lawmaker with over $200,000 in student debt says millions of borrowers will soon have to 'postpone their lives' with payments about to resume
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- Democratic Rep. Summer Lee has over $200,000 in student debt from college and law school.
- She told Insider that surging interest has prevented her from making a dent on her balance.
- She said that millions of borrowers will soon have to adjust their lives to afford another monthly bill.
Pennsylvania Democratic Rep. Summer Lee has over $200,000 in student debt.
That's a result of her education from both Pennsylvania State University and Howard University School of Law, which she graduated from in 2009 and 2015, respectively. Lee told Insider in an interview that as a first-generation college student, taking on student loans was her only option to obtain an education and progress in her career — so that's exactly what she did.
"When I went to college as a 17-year-old, I had a single mom who had been recently laid off who had no true ability to contribute to my college education, but it was really important that I went and got one," Lee said.
"I either took this loan debt or I didn't get this education, I missed this educational opportunity," she continued. "So as a 17-year-old, that seemed like a no-brainer. It seemed like something that will work itself out once you entered your career field, but that is not necessarily the case."
But despite making consistent payments on her balance since she became a member of the Pennsylvania state legislature in 2018, Lee said that her balance "never decreases" due to the surging interest on the loans that makes it difficult for many borrowers to pay down the principal balance.
And while she, and millions of other federal borrowers, have had a reprieve from making payments for the past three years due the payment pause former President Donald Trump first implemented in March 2020, that pause is ending in September — and Lee said her monthly payment is expected to be higher than her mortgage.
She said she knows she is far from alone in that. "The reality is that we're on-ramping millions of borrowers right back into a debt servitude," she said.
"People who may have bought homes will now have to delay that, people who would have started families who will now have to think again," she continued. "From doctors, to lawyers, to teachers, to social workers, people who are not going to pursue the passions that they have, or who are not going to fill positions that we need, because they're going to be deterred by seeing how hard it is for college graduates to survive and to contribute in our communities."
At the end of June, the Supreme Court struck down President Joe Biden's broad plan to cancel up to $20,000 in student debt for federal borrowers. While the Education Department soon after announced a new plan to enact relief using a different law, it would not be ready in time for the payment resumption. To give borrowers some additional relief, the department announced a 12-month "on-ramp" period once payments resume in October during which missed payments would not be reported to credit agencies. Still, interest will still accrue during that time, and borrowers will have to determine how they will handle another monthly bill.
"There is no end in sight," Lee said. "They're going to have to adjust their lives, postpone their lives, to figure out a burden that they should not have had to have had in the first place."
'We need a Plan C through Z'
The Plan A for Biden's student debt relief was the HEROES Act of 2003, which gives the education secretary the ability to waive or modify student-loan balances in connection with a national emergency like COVID-19. The Supreme Court ruled that Biden was overstepping his authority using that law to give relief to borrowers as a result of the pandemic, so after the high court's decision, Biden announced his Plan B: using the Higher Education Act of 1965, which does not require reliance on a national emergency.
Still, Lee said that more safeguards need to be in place given the constant legal challenges to student-debt relief: "Obviously we're holding out hope that there's going to be some relief, but I think that we need to start preparing. We need a Plan C through Z."
Over the past few weeks, a number of Biden's targeted debt relief policies for borrowers on income-driven repayment plans and those who said they were defrauded by the schools they attended have been blocked due to conservative legal challenges. While an Education Department spokesperson said it's "not going to back down or give an inch when it comes to defending working families," some borrowers have previously told Insider the uncertainty is leaving them in financial limbo.
While Republican lawmakers have been critical of relief and have introduced legislation to block it from being carried out, Lee said she will continue to push for debt cancellation to reach borrowers about to reenter repayment.
"When we consider who our government has bailed out in the past, industries that have taken advantage of consumers and have taken advantage of our communities who have received bailouts, and we would look back and tell students, and we would tell generations of our nation that they're not worth protecting, that they're not worth helping, I think is a wrong message to send," Lee said.
from Business Insider https://ift.tt/eRuwMA6
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