Speaker 1: Hi everyone, it's West Kasova. We want to bring you
Speaker 1: something new this weekend and introduce you to one of
Speaker 1: our favorite podcasts from WAMU and NPR. The one A podcast,
Speaker 1: hosted by Jen White, looks beyond the headlines to get
Speaker 1: to the heart of the story. Bloomberg News collaborated with
Speaker 1: one A this week for a series called Life and Debt.
Speaker 1: The series explorers debts big and small, from the federal
Speaker 1: debt ceiling to the impact of credit cards, medical debt,
Speaker 1: and student loans, and today's show is all about student
Speaker 1: loan debt. Currently, the Supreme Court is deciding the fate
Speaker 1: of President Biden's student relief plan, and at the same time,
Speaker 1: the pandemic arapause on student loan payments is set to end.
Speaker 1: Here's Jen with more.
Speaker 2: It's a weight felt by over forty three million Americans
Speaker 2: and that includes many of you.
Speaker 3: I graduated with my PhD at over one hundred and
Speaker 3: fifty thousand dollars in debt federal debt, student loans, and
Speaker 3: an additional twenty five to thirty thousand dollars in private
Speaker 3: student loan debt.
Speaker 4: I have about one hundred and forty thousand dollars in
Speaker 4: student debt. I am a first generation lawyer.
Speaker 5: I have over eighty thousand dollars in student loan debt,
Speaker 5: most of which is interest, and there is vertal chance
Speaker 5: I'll be able to pay it off anytime in my life.
Speaker 4: Those of us in Generation XT we did take out
Speaker 4: student loans. And meanwhile, we do also have children that
Speaker 4: are on their way to college or are in college
Speaker 4: right now. And if we could get some relief in
Speaker 4: our unsudent loan debt, it will be really helpful in
Speaker 4: letting us have the opportunity to help pay for our
Speaker 4: own children instead of adding more and more onto student
Speaker 4: learn debt among all of us.
Speaker 2: According to the Education Data Initiative, the average student loan
Speaker 2: debt balances upwards of forty thousand dollars and the cost
Speaker 2: of college keeps rising. Over the past twenty years, college
Speaker 2: tuition at in state public universities has risen one hundred
Speaker 2: and seventy five percent. The numbers can be dizzying, especially
Speaker 2: for recent high school grads. The Supreme Court is set
Speaker 2: to decide the fate of President Biden's student debt relief plan.
Speaker 2: At the same time, the pandemic era pause on student
Speaker 2: loan payments is set to end. For over three years now,
Speaker 2: borrowers with federal loans haven't had to pay a dime,
Speaker 2: but it all may be about to change. For this
Speaker 2: installment of our Life and Debt series and collaboration with
Speaker 2: Bloomberg News, we take a closer look at student debt
Speaker 2: and what comes next. I'm Jen White. You're listening to
Speaker 2: the one, a podcast where we get to the heart
Speaker 2: of the story. Here to help us through it is
Speaker 2: Akaela Garth. She's a White House correspondent with Bloomberg News.
Speaker 2: Betsy Mayott is the founder and president of the Institute
Speaker 2: of Student Loan Advisors. It provides free advice on student loans.
Speaker 2: She's been working in the student loan industry doing compliance
Speaker 2: and advocacy work for over twenty years. And Adam Minski.
Speaker 2: He's an attorney who focuses on helping student loan borrowers
Speaker 2: in their families. He's also a senior contributor at Forbes.
Speaker 2: Thank you all for joining us. So let's first just
Speaker 2: parse out the student loan debt relief avenues. So first
Speaker 2: came the emergency pause for a student debt enacted by
Speaker 2: President Trump during the start of the pandemic. Adam explained
Speaker 2: that initial pause and how it's been able to be
Speaker 2: extended now for over three years.
Speaker 6: Sure, of course, So President Trump initially, through executive authority,
Speaker 6: paused all payments and interest on government held federal student
Speaker 6: loans in response to the COVID nineteen pandemic in March
Speaker 6: twenty twenty, and Congress then codified that shortly after that
Speaker 6: through passage of the Cares Act, which was that large
Speaker 6: stimulus package that was passed as the economy started tanking
Speaker 6: as a result of the pandemic. Now, Congress originally envisioned
Speaker 6: the payment pause lasting six months, but then President Trump
Speaker 6: and then subsequently President Biden used executive authority to extend
Speaker 6: the pause repeatedly beyond that original six months, and they
Speaker 6: relied on the Heroes Act of two thousand and three,
Speaker 6: which is an older piece of legislation that gives the
Speaker 6: Education Department pretty broad authority to modify or waive rules
Speaker 6: governing federal student loan programs during times of an emergency
Speaker 6: such as a pandemic. So President Trump used that authority
Speaker 6: to extend the pause, and then President Trump and then
Speaker 6: President Biden followed suit after that.
Speaker 2: Well, this week, Education Secretary Miguel Cardona's spook at a
Speaker 2: Senate hearing. Here's what he said.
Speaker 7: And we're preparing to restart repayment because the emergency is
Speaker 7: period is over, and we're preparing our our borrowers to restart.
Speaker 2: Okay, So preparing borrowers to start paying Betsy. When should
Speaker 2: people be prepared to start sending in that money?
Speaker 8: Again, Well, we don't have the exact timeline yet, other
Speaker 8: than the last we heard that a prominent education had
Speaker 8: stated that the current pause would end either sixty days
Speaker 8: after the Supreme Court gives their decision on the Biden
Speaker 8: Harris det relief or by August, whichever comes sooner. So
Speaker 8: as far as when people should be prepared to actually
Speaker 8: have to hit that make a payment button, I'm estimating
Speaker 8: somewhere around September or October.
Speaker 2: Adam, is there any likelihood of another extension of this
Speaker 2: pause on repayments?
Speaker 6: It's a really good question, you know. So the COVID
Speaker 6: emergency has officially ended, and that's been a central justification
Speaker 6: of the repeated extensions of the relief. Now that that
Speaker 6: has ended, you know, they're certainly arguably is less of
Speaker 6: a rationale for extending it. That being said, the Heroes
Speaker 6: Act doesn't necessarily require that the emergency be ongoing for
Speaker 6: relief to be granted under that statute. In theory, the
Speaker 6: administration could argue that the relief is still in response
Speaker 6: to that emergency and the harm caused by it, even
Speaker 6: though the emergency has technically ended. That being said, there's
Speaker 6: no signs as far as I'm aware that the administration
Speaker 6: is seriously considering a further extension. They are saying that
Speaker 6: they are preparing to return to repayment this fall. But
Speaker 6: some folks might remember that we've been through this before.
Speaker 6: There's been several times where we were told that the
Speaker 6: pause this was the final extension, only for it to
Speaker 6: be extended again at the last moment. So I suppose
Speaker 6: anything is possible, but I think it would be prudent
Speaker 6: for borrowers to anticipate or return to repayment in September
Speaker 6: or October.
Speaker 2: As Betsy reference, I want to get into the details
Speaker 2: of President biden Student Debt Forgiveness Plan BEFER sequila. How
Speaker 2: much of a priority is student debt relief for President Biden.
Speaker 9: Student debt relief is something that was one of Biden's
Speaker 9: campaign promises when he ran for president in twenty twenty,
Speaker 9: and on the trail he made this commitment to cancel
Speaker 9: ten thousand dollars in student debt per borrower, and in
Speaker 9: pursuing this program, he even went beyond that to extend
Speaker 9: twenty thousand dollars in relief for pel grant recipients. And
Speaker 9: for those who don't know, those are people who are
Speaker 9: undergraduate students who basically display an exceptional amount of financial need.
Speaker 9: And that commitment was seen as a pretty big deal,
Speaker 9: especially because Biden has branded himself as a moderate and
Speaker 9: this was an idea that had been talked about by
Speaker 9: progressives like Bernie Sanders for a year. So it was
Speaker 9: really seen as a shift of the center in democratic politics.
Speaker 10: And one might ask, even though he.
Speaker 9: Campaigned on this in twenty twenty, why the president waited
Speaker 9: almost nineteen months.
Speaker 10: To release it.
Speaker 9: And so there's a number of reasons why that could
Speaker 9: have happened, and one is we know that Biden's team
Speaker 9: internally heavily debated the merits of broad student debt cancelation,
Speaker 9: and then the president had also hoped that Congress might
Speaker 9: act on its own to pursue debt relief. Another reason
Speaker 9: on the timing potentially is because the policy isn't popular
Speaker 9: with some moderate Democrats, think Joe Manchin and the White
Speaker 9: House may have been waiting to pass some of its
Speaker 9: key legislative pieces, like the Inflation Reduction Act before introducing
Speaker 9: this plan, in order to avoid upsetting some of those lawmakers.
Speaker 9: And lastly, because it was released in August, just months
Speaker 9: before the midterms, it was also viewed as a way
Speaker 9: to energize the base. So, whether it's all or some
Speaker 9: or those of those reasons, waiting nearly two years could
Speaker 9: have hurt the administration's legal argument here because they were
Speaker 9: relying on the pandemic. And as you know, my other
Speaker 9: panelists noted earlier that relief for that emergency declaration has
Speaker 9: now ended just about a week ago.
Speaker 2: Adam, can you give us just a brief rundown on
Speaker 2: the cases before the Supreme Court holding up Biden's student
Speaker 2: loan forgiveness plan.
Speaker 6: Yeah, so, I mean before anyone could actually receive any
Speaker 6: student loan forgiveness under this plan, there were a number
Speaker 6: of legal challenges trying to stop it. Most of those
Speaker 6: challenges were tossed, but two of them resulted in the
Speaker 6: program being blocked, and then the Biden administration appealed those
Speaker 6: decisions to the Supreme Court, which agreed to take up
Speaker 6: the cases. The two cases are somewhat different but similar
Speaker 6: arguments essentially so. The first case involves a coalition of
Speaker 6: Republican led states which are arguing that the debt relief
Speaker 6: plan would financially harm a state related loan servicing entity
Speaker 6: called Mohila based in Missouri, and that harm would in
Speaker 6: turn then harm the finances of the states. The second
Speaker 6: case involves a couple of individual borrowers who aren't entitled
Speaker 6: under the rules of the program to receive the maximum
Speaker 6: amount of forgiveness, the twenty thousand dollars, and they're arguing
Speaker 6: that the way the program was established prevented them from
Speaker 6: publicly commenting on it and participating in the regulations, and
Speaker 6: that has harmed them as well. The two major legal
Speaker 6: questions though in both of these cases number one whether
Speaker 6: the program, of course is legal. Just like with the
Speaker 6: payment pause, the Biden administration relied on the pandemic authority
Speaker 6: under the Heroes Act to authorize the program. But the
Speaker 6: second question, and arguably the one that ultimately might be
Speaker 6: the issue that decides the cases, is the issue of
Speaker 6: standing whether the challengers who brought these cases in the
Speaker 6: first place can demonstrate a harm that is both concrete
Speaker 6: and directly tied to the program that would entitle them
Speaker 6: to the relief they're seeking, which is striking down the
Speaker 6: program entirely for everyone.
Speaker 2: A Kayla, Those are the Supreme Court cases. But Republicans
Speaker 2: are taking game at student debt relief in multiple bills.
Speaker 2: Explain what they're doing.
Speaker 9: Yes, Well, I would say that this plan has received
Speaker 9: pretty universal opposition from Republicans since the White House has
Speaker 9: announced it, and there's basically two avenues in Congress right
Speaker 9: now that they're pursuing to cancel or nullify this program.
Speaker 9: One is through McCarthy's proposed debt limit bill and also
Speaker 9: through a separate bill that hopes to nullify it. Both
Speaker 9: of those face very small chances of succeeding, but that's
Speaker 9: what we're seeing in Congress.
Speaker 2: Okaylo, Why do Republicans say they don't support this student
Speaker 2: debt relief plan.
Speaker 9: Well, one of the reasons that many Republicans raise is
Speaker 9: they say that that price.
Speaker 10: Tag is just simply too high.
Speaker 9: The Congressional Bushet Budget Office estimates that just debt cancelation
Speaker 9: alone could cost the government as much as four hundred
Speaker 9: billion dollars, and coupled with the program's new income driven
Speaker 9: repayment program, which basically slashes monthly payments for barers, it
Speaker 9: could be closer to six hundred billion dollars according to
Speaker 9: their estimates. So they say, in an inflationary environment, it's
Speaker 9: just not a responsible use of money. Now, I should
Speaker 9: note that economists are divided over whether it would actually
Speaker 9: impact inflation, but nonetheless, Republicans would rather see that amount
Speaker 9: of federal money left alone.
Speaker 10: Some of them also just say they don't believe the
Speaker 10: president has the authority.
Speaker 9: They say that the Constitution doesn't grant him or President
Speaker 9: Biden specifically that kind of power.
Speaker 10: They say that only Congress has this power.
Speaker 9: And lastly, they think that it's unfair to people who
Speaker 9: chose not to pursue college because of how expensive it was,
Speaker 9: or chose to be a service member or.
Speaker 10: Go the military route.
Speaker 9: And we know that Republicans their base tends to be
Speaker 9: people who are low income, blue collar, and so for them,
Speaker 9: this is just simply not popular.
Speaker 10: Politically, Betsy.
Speaker 2: When we're talking about President Biden's plan, the one that's
Speaker 2: before the Supreme Court, right now, how far will it
Speaker 2: go to relieving some of this debt pressure from students
Speaker 2: if it goes through. We're not talking about wholesale giving
Speaker 2: people just you don't have to pay anything back. It's
Speaker 2: just a portion, right.
Speaker 10: Well, for some people it will.
Speaker 8: It would mean if it were to make it through,
Speaker 8: it would mean all of a sudden having a zero balance.
Speaker 8: And those people tend to be people that either have
Speaker 8: been paying their loans since the earth cooled, or people
Speaker 8: that have lower debt balances to begin with. And while
Speaker 8: that might seem unfair, I personally appreciated the mindfulness of
Speaker 8: this because, believe it or not, people with lower balances
Speaker 8: from the onset actually tend to have a higher default
Speaker 8: rate than those with the six figure balances. And the
Speaker 8: reason for that is the vast majority of borrowers that
Speaker 8: end up that come out of school with lower student
Speaker 8: loan balances, it's because they never finish their degree. So
Speaker 8: these are borrowers that have debt and no degree. So
Speaker 8: it could have a life changing impact, even though it's
Speaker 8: for some borrowers that end up with the six figure
Speaker 8: amounts it might just be a drop in the bucket.
Speaker 2: Well, we also hear from a lot of people who
Speaker 2: talk about the interest they pay on loans and how
Speaker 2: that interest amount sometimes is more than what they actually
Speaker 2: took out in the first place. Can you explain that.
Speaker 8: Yeah, so we hear about that a lot, you know,
Speaker 8: especially one of the features of the COVID pause is
Speaker 8: not only did it pause payments, but it paused interests.
Speaker 8: Those people have been enjoying a zero percent interest rate,
Speaker 8: And I hear from a lot of borrowers saying, you
Speaker 8: know what, if forgiveness goes through, great, but if they
Speaker 8: could keep the interest at zero or reduce the interest,
Speaker 8: that would be a much bigger impact on my overall
Speaker 8: repayment success. You know, federal student loans have a pretty
Speaker 8: unique feature where you can get payments that are lower
Speaker 8: than what your typical ten year term would be payments
Speaker 8: based on your income and so on. The benefit of
Speaker 8: that is that it keeps the payments of wardable. But
Speaker 8: the negative of that is it extends the term and
Speaker 8: therefore the amount of interest that you're paying on your loan,
Speaker 8: which is why we're hearing all these stories of people
Speaker 8: who have paid back much much more than they've borrowed,
Speaker 8: but yet still have a balance.
Speaker 2: Now, President Biden is looking at other ways to lighten
Speaker 2: the student debt low. The Department of Education is canceled
Speaker 2: more than sixty six billion dollars in debt under programs
Speaker 2: already put in place. Adam, what are some other options
Speaker 2: for borrowers who are looking for relief?
Speaker 6: Yeah, I mean, the good news here is that despite
Speaker 6: the block by the federal courts, right now is the
Speaker 6: Supreme Court considerers whether to uphold or strike down Biden's
Speaker 6: one time cancelation plan. There's all these other programs that
Speaker 6: are already working for people. One of the big ones
Speaker 6: that's been in the news a lot lately is something
Speaker 6: called the Limited PSLF waiver, which stands for the Public
Speaker 6: Service Loan Forgiveness Program. This has been a long troubled
Speaker 6: program that can provide loan forgiveness to folks who commit
Speaker 6: to careers working in nonprofit and public organizations. After ten years,
Speaker 6: it's had a whole bunch of problems, rules that are complex,
Speaker 6: poor servicing. So the Biden administration relaxed a lot of
Speaker 6: those rules and allowed more people to qualify, and the
Speaker 6: result has been something like six hundred and fifty thousand
Speaker 6: barrowers I believe have gotten their loans completely discharged under
Speaker 6: that waiver. There's also a new initiative going into effect
Speaker 6: as we speak, called the IDR Account Adjustment, which waives
Speaker 6: some rules and requirements for folks seeking loan forgiveness under
Speaker 6: income driven Repayment plans. There has been a streamlined data
Speaker 6: sharing initiative to make it easier for disabled borrowers to
Speaker 6: get relief through the Total Permanent Disability Discharge Program, and
Speaker 6: the administration has also released new regulations governing a number
Speaker 6: of loan forgiveness and discharge programs, including Borrower Defense to Repayment,
Speaker 6: which is a program designed to help people who were
Speaker 6: defrauded by their schools. A lot of these new regulations,
Speaker 6: which are set to go into effect this summer, will
Speaker 6: make it easier for to apply for and receive relief
Speaker 6: under a number of these programs.
Speaker 2: Betsy, what about at the state level? What program should
Speaker 2: browers be aware of that could offer them some debt relief?
Speaker 8: So, you know, as Adam mentioned, some of the most
Speaker 8: well known student loan forgiveness programs such as Public Service
Speaker 8: loan forgiveness and the Income Driven Plans. But what a
Speaker 8: lot of people don't realize is there's actually over one
Speaker 8: hundred student loan forgiveness programs many. I would go so
Speaker 8: far as to say most states have some sort, if
Speaker 8: not multiple, student loan forgiveness programs. A lot of them
Speaker 8: are based on profession. There's quite a few for the
Speaker 8: people in the healthcare industry, or teachers or public defenders.
Speaker 8: But there's also some sort of unique ones, such as
Speaker 8: the state of Kansas that offers student loan forgiveness just
Speaker 8: for moving to Kansas. So we have a database of
Speaker 8: those forgiveness programs on our website, but just using your
Speaker 8: Google skills, you'll come across quite a few of them
Speaker 8: a Kuila.
Speaker 2: How much will student debt play a part in the
Speaker 2: twenty twenty four presidential election?
Speaker 9: If you look at polling, the electorate at large, attitudes.
Speaker 10: On student debt is pretty mixed.
Speaker 9: But if you look at specific demographics like black voters,
Speaker 9: Latino voters, and particularly young voters, that calculus changes and
Speaker 9: the policy is pretty popular with those groups. Young voters
Speaker 9: specifically turned out to be very influential in the midterms,
Speaker 9: and they were in twenty twenty as well for Biden.
Speaker 9: But polling shows that while the issue is important for
Speaker 9: young voters, other issues still were more impactful to their
Speaker 9: vote in the midterms. This Harvard youth pull for voters
Speaker 9: between eighteen and twenty nine showed only nine percent of
Speaker 9: young people said student debt was within their top two
Speaker 9: most important issues, so other issues like abortion, climate change,
Speaker 9: inflation were still more important for that voting block. But
Speaker 9: at the same time, the vast majority of a young
Speaker 9: America and want to see some kind of government action,
Speaker 9: and the voters of tomorrow pool show that young people
Speaker 9: know about Biden's student loan forgiveness program more than any
Speaker 9: of his other policies. So while it may not necessarily
Speaker 9: drive their vote, it's still top of mind. And it's
Speaker 9: hard to imagine that if the Supreme Court does strike
Speaker 9: down this program that there won't be disappointment here well.
Speaker 2: Education Secretary Miguel Cardona said that restarting payments will be
Speaker 2: unprecedented and quote a huge lift for our team. Adam,
Speaker 2: what logistical concerns do you have if and when those
Speaker 2: payments start up again?
Speaker 6: I have plenty. You know, there's a couple of sides
Speaker 6: of this. You know, there's the fact that you know,
Speaker 6: something like forty million borrowers have not had to make
Speaker 6: payments on their loans or frankly even look at their
Speaker 6: accounts in many cases for over three years, and a
Speaker 6: lot has changed during that time. The financial circumstances may
Speaker 6: have changed, someone may have gotten married or divorced, their
Speaker 6: job has changed, The loan servicing industry has gone through
Speaker 6: a lot of change. Millions of borrowers have had their
Speaker 6: accounts shifted over to new services during that time. The
Speaker 6: Department of Education is also, unfortunately facing a bit of
Speaker 6: a cash crunch. They were flat funded, The Office of
Speaker 6: Federal Sternade was flat funded in the last budget. And
Speaker 6: so what's essentially happening is these loan servicers and the
Speaker 6: Department of Education have all these new programs to implement,
Speaker 6: but no new money to do it. And some loan
Speaker 6: servicers have actually started laying off workers and cutting customer
Speaker 6: service hours. And so it's creating what could be a
Speaker 6: perfect storm of problems where you have millions of borrowers
Speaker 6: simultaneously all resuming repayment, which has never happened before, while
Speaker 6: the Department of Education and the loan servicing system is
Speaker 6: frankly about to buckle without enough resources or funding or
Speaker 6: staff to handle it. It could be a real problem.
Speaker 6: I have concerns, and a lot of other consumer advocates
Speaker 6: have serious concerns as well.
Speaker 2: Betsy, how are you preparing borrowers for potential care.
Speaker 8: Well, to speak to Adams comments, I'm suggesting that they
Speaker 8: prepare for the worst and hope for the best. Put
Speaker 8: their patients pants on is another way I put it.
Speaker 8: But make sure they know who holds their student loans.
Speaker 8: Log onto student aid dot gov and they can get
Speaker 8: a list of their federal student loans and who's currently
Speaker 8: the servicer. Make sure their servicer has their current contact information,
Speaker 8: and then to make sure they don't miss any important
Speaker 8: information or deadlines, open all the things you know, open
Speaker 8: all the letters, open all the emails, and finally get
Speaker 8: an idea. Now what your monthly payment's going to be,
Speaker 8: and if it's not a number that is affordable and
Speaker 8: that'll fit in your budget. Utilize the tools available at
Speaker 8: student aidc Gov in other places to figure out which
Speaker 8: payment plan will best fit your budget and get your
Speaker 8: paperwork in for that.
Speaker 2: Well, one thing you wanted to mention, Betsy with the
Speaker 2: return of payment is also the potential resurgence of scams.
Speaker 2: What should burrowers be looking out for well.
Speaker 8: Unfortunately, all these great programs and improvements to student loan
Speaker 8: regulations that have happened in addition to is out and
Speaker 8: put it the perfect storm that could be on the
Speaker 8: horizon for student loan repayment. This is a Birthday, Thanksgiving, Easter,
Speaker 8: and Christmas for the student loan scammers. It gives them
Speaker 8: a lot of what sound like reasonable talking points to
Speaker 8: bate potential victims of these student loan scams. The bottom
Speaker 8: line is, if it sounds too good to be true,
Speaker 8: it probably is. And maybe even more important, you never
Speaker 8: have to pay for student loan advice or for access
Speaker 8: to a program or a repayment option that you wouldn't
Speaker 8: normally be eligible for. There isn't a person on the planet,
Speaker 8: including the people on this program today, that can get
Speaker 8: you access to a benefit that you can't do yourself
Speaker 8: directly through your loan servicer.
Speaker 2: In just a moment, we'll hear from Democratic Congresswoman Aana Presley.
Speaker 2: She cosponsored a bill urging the use of the Higher
Speaker 2: Education to cancel student loan debt. Akaylab, what are you
Speaker 2: hearing about that option?
Speaker 9: Me and my colleague Nancy Cook, I've been reporting that
Speaker 9: the administration is under pressure to basically use that act
Speaker 9: as a plan B in case they're not successful in
Speaker 9: the Supreme Court. So I'm definitely interested to hear what
Speaker 9: the congresswoman has to say about that option.
Speaker 2: Akayla Gardner is a White House correspondent with Bloomberg News.
Speaker 2: Thanks for being here. Let's take a moment and go
Speaker 2: back to our voicemail box. We get this message from
Speaker 2: one of you.
Speaker 11: The student loan crisis in this country has gotten to
Speaker 11: the point where it's just ridiculous to think that someone
Speaker 11: might be against just forgiving it all. I personally have
Speaker 11: very little student loans compared to some other people I know,
Speaker 11: and I won't get as much from this forgiveness, but
Speaker 11: even the amount I'm getting would be incredible.
Speaker 2: Let's add another voice to the conversation. Congresswoman Ayana Presley
Speaker 2: joins us now. She's a Democrat representing Massachusetts seventh District.
Speaker 2: Representative Presley, thanks for joining us.
Speaker 12: Good to be with you.
Speaker 2: So Republicans are seeking to thwart President Biden's student debt
Speaker 2: forgiveness plan. A house GOP build targets President Biden's proposed
Speaker 2: income driven repayment plan. This issue was turning out to
Speaker 2: be a hard fight for Democrats. How confident are you
Speaker 2: that student debt relief will be a reality?
Speaker 13: Well, look, we fought for years to get this done
Speaker 13: and to move student debt cancelation. This was an issue
Speaker 13: that people tried to fringe and marginalize. We worked for
Speaker 13: over two years to build a big and broad and
Speaker 13: diverse coalition of borrowers and union families and workers and
Speaker 13: presidents and civil rights organizations the number one issue for
Speaker 13: the NAACP in fact, and ultimately President Biden acted being
Speaker 13: responsive to the demands of that coalition, but to the
Speaker 13: needs of the people burden by this nearly two trillion
Speaker 13: dollar crisis. And the President acted and by executive action
Speaker 13: with the stroke of a pen, wanting to provide this
Speaker 13: transform to relief for some forty million plus people, those
Speaker 13: with PEL grants twenty thousand dollars canceled, and NONPEL grant
Speaker 13: recipients ten thousand dollars. This is an economic justice issue.
Speaker 13: It's a gender justic issue. Nearly two thirds of this
Speaker 13: two tillion dollar crisis or war by women. And it's
Speaker 13: a racial justice issue because black and brown and black
Speaker 13: bars in particular borrow and default at higher rates, and
Speaker 13: so this will zero out for one in four black borrowers.
Speaker 13: This stands to zero out their debt completely.
Speaker 2: But again, congresswomen, right now, we know there are two
Speaker 2: cases in the Supreme Court around debt relief. We know
Speaker 2: the GOP has a number of bills targeting this proposal
Speaker 2: from President Biden. Will this be a reality for people
Speaker 2: who are facing this debt? Is this going to happen?
Speaker 2: Do you think?
Speaker 13: Well, Listen, people did not think we'd get an executive
Speaker 13: action on student debt cancelation. So I'm always going to
Speaker 13: to fight the good fight, particularly on an issue as
Speaker 13: consequential as this one. This debt is choking people, and
Speaker 13: it's not just a millennial or Gen Z issue, and
Speaker 13: it's disingenuous for people to say, well, I did it
Speaker 13: and others can too. We should want more and better
Speaker 13: for the next generation. But moreover, I have seventy six
Speaker 13: year old in my district on fixed incomes who are
Speaker 13: worried they're going to die, are still paying on this debt,
Speaker 13: and at this time they are paying more than they
Speaker 13: even borrowed. Educators who have confided with me about suicide ideation.
Speaker 13: The psychological toll of this debt, debt they took on
Speaker 13: because they want to teach our babies, and they can
Speaker 13: barely meet the monthly minimums. I'm not surprised that the
Speaker 13: GOP is doing everything in their power, you know, and
Speaker 13: have many co conspirators in that effort, unfortunately, to obstruct
Speaker 13: and overturn the will the majority.
Speaker 10: Of the people.
Speaker 13: I understand where it is with the Supreme Court, but
Speaker 13: the legal case is sound. President Biden has the authority.
Speaker 13: This is transformative, life changing relief for some forty million
Speaker 13: plus people, and the case is the legal case is sound.
Speaker 2: I want you to hear from one of our listeners.
Speaker 14: We need to be fiscally responsible for our debts and
Speaker 14: going on to college, one should expect if you cannot
Speaker 14: pay in full that there will be a balance at
Speaker 14: the end of your college time. I also feel that
Speaker 14: the money that the government wants to spend in relief
Speaker 14: would better be spent on the high schools and counselors,
Speaker 14: constructing parents and family and perspective students.
Speaker 2: As you've alluded to, Congresswoman, you've heard this argument before.
Speaker 2: People take out house loans and credit card loans and
Speaker 2: they aren't given relief. Specifically when we're talking about taxpayer money,
Speaker 2: and we should note that about eighty three percent of
Speaker 2: American adults don't have student loans. What is the art
Speaker 2: you make for providing relief through taxpayer money for those
Speaker 2: who did take out loans?
Speaker 13: Jen, Again, this is an issue of consequence that is
Speaker 13: affecting people from every walk of life. It is destabilizing families,
Speaker 13: choking at really the promise of our families, our communities,
Speaker 13: and this country. And it's disingenuous to use really a
Speaker 13: dated comparison that is hardly an apples to apples comparison.
Speaker 13: You can't say we live in a meritocracy and that
Speaker 13: education is life's great equalizer when we have put it
Speaker 13: farther and farther out of reach for people. The cost
Speaker 13: of higher education is increased by one hundred and fifty percent.
Speaker 13: So I agree that there are other there's other work
Speaker 13: that we need to do. We have to expand pell grants,
Speaker 13: we have to invest in HBCUs, in vocational education, there
Speaker 13: are so many other ways that we need to get
Speaker 13: at this.
Speaker 12: But it's not or it's both.
Speaker 13: And because again, this is impacting people from every walk
Speaker 13: of life, from seniors to new parents. And again to
Speaker 13: disparate impact on black and brown communities. For example, Black
Speaker 13: Americans have been locked out of every major federal relief
Speaker 13: program in this country, from the GI Bill to the
Speaker 13: Homestead AD. Are families targeted by redlining, denying us the
Speaker 13: ability to build generational wealth, which is why we borrow
Speaker 13: at higher rates. So this is an economic justice issue,
Speaker 13: it said, gender justice issues, or racial justice issue. These
Speaker 13: legal challenges that have been mounted are nothing more than
Speaker 13: frivolous partisan attempts to prevent what is a legal, popular,
Speaker 13: and sorely needed policy from going into effect. The Supreme
Speaker 13: Court should uphold the law and affirm the president's authority
Speaker 13: to cancel student debt.
Speaker 2: You're a co sponsor of a bill calling for President
Speaker 2: Biden to use an executive order to cancel up to
Speaker 2: fifty thousand dollars for federal loan borrowers.
Speaker 3: Now.
Speaker 2: In twenty twenty one, House Speaker Nancy Pelosi said in
Speaker 2: a press briefing that President Biden couldn't forgive student debt
Speaker 2: even if he wants to. There's disagreement over the of
Speaker 2: the president's authority to fully forgive student loans. What's your
Speaker 2: argument for why he has that legal authority.
Speaker 12: Well, the President has the legal authority.
Speaker 13: It's been given to him by Congress, and the same
Speaker 13: authority that was used to pause student loan payments during
Speaker 13: the pandemic, which myself and others advocated for. It's the
Speaker 13: same authority. So the legal cases sound. The President has
Speaker 13: acted being responsive to the demands of this broad and
Speaker 13: diverse issues based coalition, but moreover, responsive to the needs
Speaker 13: of the people. And executive action is the most direct
Speaker 13: and precise way to get this done. And the legal
Speaker 13: authority is clear, and the President, I'm grateful he's made
Speaker 13: a commitment. Regardless of the court his should find a
Speaker 13: way he will to get this done.
Speaker 2: If the Supreme Court rules against Biden's plan, what other
Speaker 2: options does Congress have to keep pursuing student loan forgiveness.
Speaker 13: Look, I'm a firm believer that organized power is realized power.
Speaker 13: We've seen that over the last two years, and that
Speaker 13: people did not even think we would get to the
Speaker 13: point of executive action on student debt cancelation. So you know,
Speaker 13: as an organizer, I you know, I don't suffer for
Speaker 13: contingency plans. I always have one, But at this time
Speaker 13: I'm not seating any ground the Supreme Court should uphold
Speaker 13: the president's legal authority. The authority is clear, and they
Speaker 13: should just uphold the law.
Speaker 12: So I'm not seating any ground here.
Speaker 13: As an organizer, I always have contingency plans, but you
Speaker 13: know we're not their Student debt cancelation is a popular policy,
Speaker 13: it's legally sound, it's deeply needed. It'll be transformational.
Speaker 7: Uh.
Speaker 13: When I think about the people that I've heard from
Speaker 13: throughout this country who during the pandemic spoke about the
Speaker 13: impact it had on their lives to have that pause
Speaker 13: on payments, and that was just during during the pandemic.
Speaker 13: Imagine just how transformational and game changing will be when
Speaker 13: we get this done for this forty million plus people
Speaker 13: who stand to benefit from this relief.
Speaker 2: That's US Representative Ayana Presley. She's a Democrat and represents
Speaker 2: Massachusetts seventh district. Congresswoman. Thanks for joining us. Thank you,
Speaker 2: And we're talking about student loan debt and answering your
Speaker 2: questions with Betsy Mayott, founder and president of the Institute
Speaker 2: of Student Loan Advisors, and Adam Minsky. He's an attorney
Speaker 2: who focuses I'm curious to hear from each of you,
Speaker 2: your thoughts on the conversation we just heard with Congresswoman Presley.
Speaker 2: What stood out for you.
Speaker 8: Well, you know this is you know, as she mentioned,
Speaker 8: this student loan forgiveness has been a really important issue
Speaker 8: for her office as well as, for example, Senator Warren's office.
Speaker 8: So I expected the messaging from her that we received,
Speaker 8: and you know, I agree that this forgiveness program, if
Speaker 8: it were to go through the Supreme Court, will be
Speaker 8: life changing for a lot of borrowers. I mean, going
Speaker 8: back to what I said earlier about the borrowers with
Speaker 8: the lower balances are the ones that struggle the most.
Speaker 8: We're not talking just you know, sort of getting rid
Speaker 8: of a debt that someone agreed to so much. We're
Speaker 8: talking about people who this will make the difference of
Speaker 8: whether they can pay their light bill or not. So,
Speaker 8: you know, I agree that this form of student loan
Speaker 8: forgiveness can be transformational, especially to the most marginalized borrowers.
Speaker 2: Adam, briefly your thoughts.
Speaker 6: So, you know, one you know, very interesting question here
Speaker 6: that we heard a little bit from the congresswoman on
Speaker 6: was you know this idea is is there going to
Speaker 6: be a backup plan, a contingency plan if the Supreme
Speaker 6: Court does wind up striking down the program. There has
Speaker 6: been a push by a coalition of consumer advocacy groups
Speaker 6: and some legal experts to get the buy An administration
Speaker 6: to consider essentially reissuing the program under a different legal
Speaker 6: authority under the Higher Education Act if the Court down
Speaker 6: the program under the Heroes Act. The Higher Education Act
Speaker 6: has its own provision that arguably could provide some authority
Speaker 6: to the Education Department to cancel student debt, and the
Speaker 6: Administration is actually cited to that authority in a different
Speaker 6: context involving broad student loan cancelation. So I think it's
Speaker 6: an interesting question. What will the Biden administration do if
Speaker 6: the Supreme Court rules against them? Is there a backup
Speaker 6: plan and what would it look like.
Speaker 2: Let's go back to our voicemailbox.
Speaker 15: Hello, my name is Blake calling from Oklahoma City, Oklahoma. Essentially,
Speaker 15: I think the answer to the student loan debt crisis
Speaker 15: is to move towards interest free loans. Doesn't make any
Speaker 15: sense for students to be patting the pockets of any
Speaker 15: lenders just to get an education, and in fact, we're
Speaker 15: already seeing what that does to people on the other end.
Speaker 15: It cripples the economy, and it cripples it kind of
Speaker 15: mortgages the future. So I think if we can get
Speaker 15: towards an interest free type of world where the loans
Speaker 15: are basically backed by the federal government not by private lenders,
Speaker 15: that would be best for everyone.
Speaker 2: Adam might love to hear your thoughts on that, well.
Speaker 6: I mean, one of the problems is that even for
Speaker 6: government issued loans, the government is charging an interest rate.
Speaker 6: We've heard several times throughout this discussion that one of
Speaker 6: the biggest complaints from borrowers is that you can pay
Speaker 6: back essentially everything that you borrowed and still owe an
Speaker 6: enormous balance because of how interest works and how interest
Speaker 6: can accrue in excess of your payments, and interests can
Speaker 6: accrue and be capitalized during certain periods, and if something
Speaker 6: bad happens, like you slip into default because off a hardship,
Speaker 6: then even more fees are at it as well. It
Speaker 6: can really become a hopeless situation. I definitely do think
Speaker 6: that we need interest reform. One of the nice features
Speaker 6: of the proposed overhaul of income driven repayment by the
Speaker 6: Biden administration is that it would actually waive any excess
Speaker 6: interest that a cruise above and beyond a borrowers monthly
Speaker 6: student loan payment. So that's one example of I think
Speaker 6: a broad away array of interest fixes that we need
Speaker 6: for the student loan system.
Speaker 2: That's Adam Minski. He's an attorney who focuses on helping
Speaker 2: student loan borrowers and their families. He's also a senior
Speaker 2: contributor at Forbes. Also with us was Betsy Mayott. She's
Speaker 2: the founder and president of the Institute of Student Loan Advisors.
Speaker 2: She's been working in the industry doing compliance and advocacy
Speaker 2: work for over twenty years. Thanks to you both. This
Speaker 2: conversation is part of our Life and Debt series in
Speaker 2: collaboration with Bloomberg News. Throughout the series, we discussed the
Speaker 2: federal debt, sealing, credit card debt, medical debt, and more.
Speaker 2: Today's producer was Michelle Harvin. Barbon Guiano produces our podcast.
Speaker 2: This program comes to you from WAMU, part of American
Speaker 2: University in Washington, distributed by NPR. I'm Jen and White.
Speaker 2: Thanks for listening, and we'll talk more soon. This is
Speaker 2: one ASP