A lot of parent borrowers and about 15 percent of my clients are over the age of 55, and most of them will have Parent Plus loans, and they are not able to retire because of the amount of debt they have, said Jan Miller, president of Miller Student Loan Consulting.
Of course, professionals in fields like medicine are different from those who may have been misled about the value of their degree in the current marketplace, or those who face the possibility of never seeing a salary that justifies the economic investment they made in college or graduate school.
That applies even to those who attend elite schools, which often s as gateways into selective industries – you pay for the connections that a program provides as much as for the education – while seldom making students aware of the financial consequences. The Wall Street Journal found that film program graduates of Columbia University with federal student loans had a median debt of $181,000, even though half the borrowers were making less than $30,000 two years after graduation.
And whatever the situation, Miller has seen the toll that student debt can take on people’s lives, from when they’re thinking about buying a house or even when they can get into a long-term relationship where marriage might be a goal.
I sometimes call myself a student loan therapist because borrowers have to make difficult choices, and the debt is always looming over their head, Miller said.
Miller often works with people who have significant loan amounts, like physicians or dentists, to strategize the most efficient way to pay off their loans, which often stray over six figures
Omar said that her overall goal is eliminating student debt in its totality, but she conceded that it probably wouldn’t happen in the current political climate. Any steps that the president takes to cancel student debt at any amount is going to be helpful in moving the needle for a lot of the people that I represent, Omar said.
Instead, she hopes Biden will eventually act on canceling student debt of at least $50,000, a goal also targeted by Senate Majority Leader Chuck Schumer and Minnesota Sen. Tina Smith.
Yet Miller argues that none of the suggestions currently floating around Congress addressing debt cancellation would have life-changing consequences for many people. If your income is really low, you can use an income-driven repayment program, Miller said. But if your income is higher, and you owe $70,000 in debt, and your income is $70,000. A $70,000 loan would create about an $800 monthly payment on a 10-year term at six or seven percent interest. That’s lowered the payment by maybe $100 a month. So for the people who aren’t already suitable for low-income forgiveness programs, it doesn’t do a whole lot for them.
Structural change over loan forgiveness
Eliminating debt at a much higher level than Biden has proposed also wouldn’t do much to address what many see as the more fundamental issue: College is too expensive for most American families, with costs that often official statement have virtually no relationship to the value that students could possibly get in exchange, argues the international Organization for Economic Cooperation and Development .
This is one of the reasons why I think we have to be talking about larger systems of change, Baker said. How do we both make college more affordable and help other people who attended college when it was not affordable?
During his 2020 campaign, Biden promised two years of free tuition and fees at community college or a public four-year university. After his election, though, that plan was downsized to funding tuition and fees only at community colleges.