Student Loan Debt Hurting Many Americans: Why Is There So Much Pushback Concerning Forgiveness?

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Student loan debt has pushed millions of American families into debt and left borrowers with outstanding balances that will be difficult to repay. The latest extension of the student loan forbearance period was to be the last, according to a statement from the U.S. Department of Education. Repayment, interest and collections will begin again on Jan. 31, 2022, leaving many to wonder how they will manage their student loan debt payments.

See: Should You Still Make Payments on Student Loans During the Moratorium?
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There have been calls on Congress to forgive student loan debt or alter the federal Plus programs; however, The Wall Street Journal reports that lawmakers have been reluctant to act for several reasons. 


1. Major Legislative Proposals Are Difficult to Sell

There have been proposals to cap what borrowers can take out and to tighten eligibility requirements, but this may not help lower tuition costs. Restrictions and limitations could send students to private lenders instead — lenders which typically demand higher interest rates and less favorable repayment terms. 

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2. Plus Programs Have Been a Moneymaker

Losing Parent Plus would cost the government $1 billion to $3.6 billion a year according to Jason Delisle, a senior policy fellow at the Urban Institute, per the WSJ.

Considering that the Plus programs have brought in revenue for the federal government, putting a cap on those programs would mean that there would need to be budget cuts elsewhere to offset this lost revenue. 


3. Pushback From Universities

According to the WSJ, lawmakers, congressional aides and former administration officials have stated in interviews that there’s a fear of angering universities. Schools and their associations also rank among the top industries lobbying the federal government against any reduction to borrowing caps.


4. The Borrowers Aren’t Who Congress Expected

While the Parent Plus program was initially designed for higher-income parents, the WSJ noted that more lower-income families recently took out Plus loans as tuition rose faster than inflation. The WSJ added that about half of recent Parent Plus borrowers had children who received federal grants meant for low-income students.


5. Student Loan Issues Not Seen as Urgent Enough

Neither party sees the current issues facing the student loans apparatus as urgent enough to make a massive overhaul to relevant programs, per the WSJ. Lawmakers say that any pertinent changes are likely to come via the Higher Education Act’s next reauthorization.

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See: Should You Be Putting More Money Into a 401(k) or Toward Student Loan Debt?
Find: How Gen Z’s Future With Student Loan Debt Looks Compared to Millennials

“You could make it a popular political issue,” said lobbyist Brendan Belair of the Plus programs, per the WSJ. “But it just hasn’t ever gotten there.”

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About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.

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