This article is one of a series of articles produced by Word in Black through support provided by the Chan Zuckerberg Initiative. Word In Black is a collaborative of 10 Black-owned media outlets across the country.
By RayJaun Stelly, The Seattle Medium
Student loan debt has become a point of frustration for many recent college grads. When President Biden was elected, he indicated that borrowers would have their student loan debt forgiven, which has yet to happen. This unfulfilled promise has many borrowers feeling conflicted, and questioning whether or not to pay back their loans.
Although there has been a pause on federal student loan payments for the last three years, the delay is set to end once fall comes around and this is leading some borrowers to consider boycotting their payments. Intelligent.com, a trusted resource for online degree rankings and higher education planning, has published a recent survey report that says 6 in 10 federal student loan borrowers are likely to boycott payments this fall.
The survey, which included responses from 1,000 federal student loan borrowers, indicated that 62% of borrowers are set to boycott loan payments, and 500 of the 1,000 believe the boycott could lead to total debt forgiveness. In addition, 71% say that they have or will take on extra work in preparation for payments resuming, 49% are doubtful they will be able to afford their loan payments, and 8 in 10 likely voters say candidate’s student loan beliefs will influence their vote.
“President Biden made me a believer when he announced his student loan forgiveness initiative,” says recent college grad Carliss Bussey, Jr.
“College was already hard enough, and I managed to graduate, therefore years after hearing I could potentially be debt free was a huge reward in my eye,” added Bussey. “Now that I am hearing payments are resuming in the fall I am at a standstill with frustration. Despite student forgiveness being offered to the world and now all of a sudden not being honored I am inclined to join the boycott with others.”
Rikin Shah, former head of business operations for the student loan refinancing company Earnest, says that choosing not to repay student loans could present more problems for borrowers, and advises them to understand the potential consequences of their actions before making any decisions.
“Boycotting student loan payments can lead to severe financial consequences for borrowers including damaged credit scores, garnished wages, seized tax refunds, and ballooning loan balances from accumulating interest,” said Shah. “The federal government has extraordinary powers to collect on defaulted student loans, like wage garnishment without a court order and withholding of Social Security benefits, so avoiding payments is very difficult. There needs to be mass participation to pressure policymakers, but most borrowers should continue making payments responsibly.”
Despite warnings from people with insight into potential consequences, many borrowers believe that a boycott could force policymakers to seriously look at the impact that student loan debt is having on young borrowers and will force them to either partially or fully forgive their loans. Others say that they want to bring attention to the issue and are prepared to help elect politicians who are committed to honoring the promise of eliminating student loan debt. Even with these possibilities, the reality is that, right now, these loans are expected to be paid back and with payments expected to resume in the fall borrowers have a small window of time to properly prepare for it.
James Sellers, who graduated from college in 2020, has an income-driven payment plan set up through a loan service provider but his loan payments may be subject to change because of COVID-19 Loan Forbearance which allowed federal student loan borrowers to skip payments. With payments set to resume in October, Sellers in uncertain how his new payments will affect his other monthly financial obligations.
“I am in favor of boycotting the payments because there is little to no consistency in how to track how much we really owe on a monthly basis,” said Sellers. “Are we paying back what we agreed or have been paying since forbearance kicked in? Will my payments radically change this upcoming election? There’s a lot of unknowns.”
In order to prepare for the uncertainty surrounding student loans, 71% of the survey respondents say they are prepared to take on more work in order to prepare for the resuming of payments, 50% have a plan to start a side hustle, 34% will try to pick up more hours at work, and 20% are going to get another job.
While many borrowers understand their obligations to repay student loans, many of them feel that eliminating their debt could help them become financially stable much sooner.
“I honestly I could use the amounts that I would owe from student loans to save up for a home,” says Sellers.
“After having part-time jobs that were not taxed, I owed taxes,” Sellers continued. “I already have high monthly payments post-graduating between Seattle rent, taxes, and insurance payments having to add student loans on top of this would only make me have to make more sacrifices to my quality of life just to keep up.”
Jonae Brown, who graduated from college in 2020, says that, according to her current payment schedule, it will take her eight more years to fully pay off her student loans, which could limit her ability to get ahead until she’s in her 30s.
“Graduating from college was amazing, one of the things I looked forward to was my loans being forgiven, life itself is already expensive, and adding these loans adds insult to injury,” said Brown. “I know having this weight lifted off my and everyone else’s shoulder will be one of the greatest things to take place, because it feels as if we will truly never pay our loans off.”
The reality for many borrowers is that student loan debt is an issue that’s hindering them as far as expenses are concerned. Realizing that for many students the notion of going to college today means that they will incur some student loan debt is something that could potentially push them further away from going to school, especially if they believe that it will take them a significant portion of their adult life to repay the loans.
“For most students, debt is a reality. However, how they perceive their financial situation in general has a critical impact on how it affects their lives, choices, and progress in college,” says Professor and higher education advisor, Diane Gayeski. “Research has found that students perceive debt quite differently – and a lot of it depends on the financial literacy they’ve developed through conversations with their parents or other influential sources. Many students who try to avoid loans struggle to try to work their way through college, and therefore may get less out of the experience.”
“Much of what is very confusing for students and their families is trying to predict how much money they will actually need from semester to semester, and wondering if the state or national government is going to forgive their loans. This uncertainty adds to the stress which is the most compromising aspect of this whole situation,” she added.
