So, I initially wrote an article to go live during the first few months of 2020 (during my maternity leave). And then the world changed. And then it didn’t change back within a few months as we thought. We are obviously living in a world where many are still reeling from the repercussions of the pandemic: still unemployed, struggling to get by, with many behind on bills.
For those struggling with student debt during the pandemic here are some resources that get updated as new information/legislation rolls in.
- Consumer Financial Protection Bureau Information Page for Student Loan Borrowers
- The Institute for Access and College Success Page for Student Loan Borrowers
- Student Loan Hero Coronavirus Information Center
- Student Loan Borrower Protection Center: Student Loan Repayment During the Coronavirus Pandemic
But, in the event you’re still working and can still afford your student loan payments, I’m going to talk to you for just a second.
Because everyone is getting really hot and bothered about the potential for the new presidential administration to cancel student loans.
Back in February 2020 (pre-COVID), CNBC published an article about The Debt Collective, a political group of student loan borrowers protesting student loans by “canceling” their payments. Back last year, these folks were going on strike in an effort to change the system, which is initially what inspired the idea behind this post.
Often, I keep my head out of the student loan conversation.
My parents footed the bill for my college education. But I have had other types of debt in my life, like credit cards. (See how I paid off debt here.) When I got my first credit card, I definitely didn’t understand how it worked and I got in a lot of trouble.
But I paid it off. I didn’t light my credit card bill on fire because I didn’t understand how a credit card balance or compound interest worked.
For one thing, failing to pay back creditors tanks your credit score, which can make it even harder to get financially ahead when you want to do things like buy a car or a home, or hell, even rent an apartment.
But one of the big rules of money lending is that if you borrow money…for whatever reason…you have to pay it back. Well, someone does, anyway.
Please do not misunderstand me.
I’m not saying the higher education system isn’t broken. It is.
And college is definitely way too expensive.
But taking out money and then choosing not to pay it back because you feel the system is predatory or that your degree didn’t benefit you is wrong.
There is no such thing as free lunch and that someone, somewhere will have to foot the bill for the billions (trillions??) of dollars in forgiveness.
Your loans may be forgiven, but you’ll still be paying for them elsewhere. Either with inflation or higher taxes or something else.
Perhaps the largest part of me disagrees with blanket student loan forgiveness because I feel it diminishes the hard work of everyone I do know who has paid off their loans and managed to get ahead. Sure, some people (like myself) have had substantial privileges, but many people do not and still manage to pay off their debt, often on miniscule salaries, and they do it through hard work.
I agree the system is broken. I don’t know how we can even begin to fix it, but I’m hoping people much smarter than I are already working on that.
Here’s what I believe:
- There should be caps on how much money financial institutions can charge for tuition.
- And there should be even more financial education around student loans and what the terms mean and how to educate those who are taking out loans so they are fully aware of what they’re taking on before signing on the dotted line.
- There should be legislation that supports a minimum livable wage and more employers should be incentivized to participate in forgiveness programs or offer student loan payoff as a benefit.
- Healthcare should be less expensive so many can put money current going to insurance premiums to paying off their education instead.
But I don’t believe in student loan forgiveness.
Don’t quit paying your student loans because the hope for loan forgiveness in 2021 is a little bit more likely. It certainly isn’t a foregone conclusion until legislation is passed.
In the meantime, please keep paying your student loans.