On June 30, the Supreme Court completed its agenda by blocking debt relief for thousands of students and former students struggling to pay interest and principal on debts incurred mainly because of a screwed-up system of supporting college attendance. The decision came just in time for the justices to enjoy the long July 4 weekend. One wonders if Justices Thomas and Alito planned extravagant vacations paid for by billionaires who might later have cases before the Supreme Court. One thing for sure, Americans burdened by college debt will not be spending money on lavish Alaska fishing trips.
In his opinion for the six-member conservative majority, Chief Justice Roberts writes, “President Joe Biden’s student debt cancellation plan was such an overreach you might as well have said French revolutionaries ‘modified’ the status of the French nobility.” How ironic. Roberts may as well have added, “Let them eat cake!”
Taking steps to make college more generally affordable might encourage many more people to seek the benefits of higher education.
Legal experts argued that the Supreme Court should not have adjudicated the case at all because the plaintiffs did not have legal standing. In other words, there was no evidence that they were harmed by Biden’s executive order. This would not have been an unusual move for SCOTUS. In 2020 and 2021, this conservative court denied five cases because the plaintiffs lacked standing. In her dissent, Justice Kagan summarizes the case against standing, writing, “No proper party is before the court. A court acting like a court would have said as much and stopped.”
But this court was not acting like a court but like partisan activists. They did not stop. Instead, they blocked the promise of relief to 40 million borrowers, including 16 million who had already applied. In Pennsylvania, 1.15 million applied or were automatically eligible, and 742,300 were approved.
Opinions opposing student debt forgiveness
Some have argued that it’s not fair to students who never attended college to pay off student loans for those who did. That point assumes that education is a private investment and not one that improves society. In fact, taking steps to make college more generally affordable might encourage many more people to seek the benefits of higher education.
Others say that it’s not fair to students who have paid off their debts to provide loan forgiveness now. That assertion does not recognize that many who have completed loan repayment did so when college costs were lower and loans were more manageable. Additionally, the neediest students took out larger loans than those incurred by classmates with somewhat higher family incomes. Is it fair that students from the most economically challenged families now have larger debts (with interest constantly accruing) than their classmates with somewhat higher family incomes?
Why student debt relief would have been the right thing to do
The Executive Order included $10,000 in student debt forgiveness for people earning less than $125,000 and $20,000 for students from low-income families who had received Pell Grants. As I wrote in the Citizen 10 months ago:
Controversy has been raging over the plan’s impact on everything from equity to inflation. What’s too often missing in the discussion is the overriding purpose of higher education, not as a privilege, but as a public good. As Jamie Merisotis, President and CEO of the Lumina Foundation, reminds us, it’s only recently — since the 1980s — that college has been regarded ‘as mainly benefiting graduates.’ He points out that ‘passing rising expenses along to students and families has been a costly failure,’ according to recent Public Agenda-USA Today polling.
Statements about the cost of the loan forgiveness program (estimated at $400 billion) do not compute the inevitable loss of revenue from overwhelmed loan recipients defaulting on their debt. The personal consequences for default are enormous. Laws prevent student loan borrowers from the relief afforded by bankruptcy — a remedy invoked by many who oppose student loan forgiveness. (I’m looking at you, Donald Trump!)
What the Supreme Court has done is done. Let’s now move on to constructive next steps.
The nation loses when students, without the relief that would have been offered, default on loans. Millions of students have left college with no degree and plenty of debt. Many, because of this debt or because they have defaulted, have not returned to college. A study by Judith Scott-Clayton of Columbia University found that the loan default rate for borrowers without any degree was 40 percent, compared with 8 percent for those with bachelor’s degrees. I believe that loan forgiveness might have been interpreted by large numbers of these individuals as a sign from the universe that they should complete their degrees.
President Biden’s backup plan
What the Supreme Court has done is done. Let’s now move on to constructive next steps. Anticipating the conservative activism of the Supreme Court, the Department of Education planned in advance for alternative means for debt relief in the following ways:
- Initiated on Friday, June 30, “a regulatory process to provide debt relief” to help working and middle-class borrowers. Secretary of Education Miguel Cardona acknowledged that this process would be slow, involving systematic consultation with experts. Please, be watchful for opponents’ attempts to stop or delay this process.
- On Friday, June 30, the DOE finalized a new income-driven repayment plan, cutting monthly payments to zero dollars for millions of low-income borrowers and saving at least $1,000 per year for many others, while stopping runaway interest that too often leaves borrowers with more debt than their initial loan.
- Established “a 12-month on-ramp transition period,” allowing borrowers to return gradually to repayment without falling into delinquency or default. Although interest will accrue, borrowers will avoid the harshest consequences for missed payments: negative credit reports or referral to collection agencies
It’s essential for readers to communicate these actions to student debt-holders, who should immediately consult the Department of Education website to implement the income-driven repayment plan.
Make college attendance more affordable without dependence on student loans
- Some argue that the student debt crisis would never have occurred if tuition costs were lower. Some blame colleges and universities for raising tuition and then encouraging student indebtedness. It’s reprehensible if any higher education institution has ever done that. But I have to say, in my 50 years of service at private and public institutions and on the boards of higher education associations, I have never encountered a not-for-profit university that was engaged in that cynical practice. (I can’t vouch for the for-profit institutions.) On the contrary, financial aid officers, often working in understaffed offices, do their best to advise students to keep loans at a minimum. The problem is that universities and colleges need more and better-trained financial aid specialists.
- Those arguing for lower tuition often cite the high cost of prestigious private universities, for instance, those in the Ivy League. The truth of the matter is that most Ivy League universities cover all undergraduate college costs for low-income students and strongly discourage loans. Some of these institutions are “need-blind,” meaning they don’t look at students’ financial need before admitting them.
- Some point to tuition increases at public universities and argue for laws to keep tuition affordable. For example, Pennsylvania House Republicans are holding up state funding for Temple, Penn State, Lincoln, and University of Pittsburgh because, among other reasons (trans healthcare, fetal tissue research), they want the institutions to freeze tuition. The problem is that at state and at state-related universities, tuition increases are a direct measure of inadequate state support. And public support for higher education in Pennsylvania has been unacceptably low for at least two decades.
There are things you can do to end student debt before it happens.
- Lobby Congress to increase Pell grants.
- Lobby the PA legislature to increase grants for low-income students.
- Follow the lead of Illinois and a few other states that require high school students to fill out the FAFSA form before graduation.
- Encourage colleges and universities to improve financial aid counseling — and support those efforts with philanthropic donations.
- Contribute to The College Promise, a national, nonpartisan nonprofit ensuring that hardworking students have access to higher educational opportunities and support. See if any of their programs can help you or someone you know.
- Refer students to information at the Philadelphia Education Fund. Visit their online portal Philly Goes 2 College, or contact PEF to see if any of their programs will help you and your family. You can also donate to support their work.
An educated citizenry is essential to democracy. Affordable higher education is a public good. We all benefit. Let’s never forget that.
Elaine Maimon, Ph.D., is an Advisor at the American Council on Education. She is the author of Leading Academic Change: Vision, Strategy, Transformation. Her long career in higher education has encompassed top executive positions at public universities as well as distinction as a scholar in rhetoric/composition. Her co-authored book, Writing In The Arts and Sciences, has been designated as a landmark text. She is a Distinguished Fellow of the Association for Writing Across the Curriculum. Follow @epmaimon on Twitter
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