Voices of Trinity: Student Loan Debt Relief
Here’s the link to the slide deck we presented in the Campus Conversation on Student Loans:
A bit of data and information up front as you read this essay: Trinity strives to keep college affordable, with tuition levels that are much lower than other private universities and very generous financial aid packages. But having said that, we are well aware that our students have to take out loans —- very few private loans, most are federal loans — and loans can create great hardships. We also know that many Trinity students are in college to earn degrees required to enter licensed professions: nursing, early childhood education, occupational therapy, public health, counseling — and all of our students want their degrees to be able to enter professional positions and move up into decision-making positions in management, as well as having the lifelong intellectual growth and satisfaction that a great higher education fosters. Trinity students know that a great college education is essential to continue the quest for racial and social equity in their lives, and for the sake of their children and families. But we know that our students also labor under the cost burden of college.
In our racial equity statement known as Trinity DARE, we have made a specific commitment to raise money to reduce or eliminate student loans since women, women of color, and Black women in particular carry the highest student loan debt burdens in the country. Trinity’s overall student debt profile looks like this:
- Average undergraduate student debt at graduation or upon leaving Trinity: $22,000
- Average graduate student debt at graduation or upon leaving Trinity: $59,000
- Overall average student debt: $29,000
- About 5,000 Trinity graduates and former students are in the repayment system for federal loans.
- About 26% have loans of less than $10,000
- About 43% have loans of less than $20,000
We are trying to get more refined data, but what those numbers tell us right now is that a substantial proportion of our current borrowers in repayment will realize significant relief from the Biden Administration’s Student Debt Relief Plan, and many Trinity borrowers may be able to wipe the slate clean through the various loan forgiveness plans.
Final note: the Biden Administration is promising to release specifics about how to apply for the debt relief paydown in October. Meanwhile, we urge all borrowers to review the information on the Federal Student Aid website and we will continue to provide more information and instructions on email.
Student Debt Relief Plan and Controversy
Last week, President Biden announced his long-anticipated plan for student loan debt relief, and immediately critics from all sides pounced on the plan, some on the left saying it was not enough, most on the right bitterly complaining about how it was so “unfair” as if no government subsidies ever before benefited some citizens but not others.
Particularly aggravating are the journalists who do not seem to know any people who might actually be worthy of the Biden plan.
It’s a “regressive, expensive mistake” harrumphed the Washington Post Editorial Board, saying that the plan will “…provide a windfall for those who don’t need it.”
Other presumably well-educated, privileged pundits echoed this sentiment — ignoring the fact that the majority of borrowers suffering under oppressive levels of student loan debt are women of modest means, and particularly Black women who carry the highest student loan debt in the country — and who suffer chronic race and gender discrimination in employment, meaning that even if they are hired into major for-profit corporations, their earnings are likely to be far less than white men; and often, women and women of color pursue degrees so that they can work in modestly paid licensed professions as teachers, counselors, social workers and healthcare professionals. For too many borrowers, the student loan system winds up adding debt to their pile through mounting interest rates over time, compounding the cost of the loans and making it impossible to borrow for other life needs such as buying a home or a new car.
Some critics complained (with elaborate economic models to demonstrate the rightness of their righteous anger) that the plan would make inflation worse, as if every student loan borrower was going to take the $10,000 relief and rush to Amazon to buy more stuff. Seriously, it doesn’t work that way! Reducing loan debt means that borrowers will pay less over time, but there are no “loan stimulus” checks about to hit mailboxes! What a lower debt payment really means for millions of stressed-out borrowers is that they might be able to pay their monthly bills all at the same time, not putting them on a little carousel to decide what to pay this month or next month, or maybe put a little something into savings for the first time in a long time. I have to wonder if editorial writers who talk about the “windfall for those who don’t need it” have talked to any teachers recently about the mis-match between what it cost them to get and stay licensed, and to equip their classrooms (often on their own dimes, er, dollars) compared to their rates of pay.
What Are Trinity Students Saying About Student Loan Debt Relief?
In order to get some real life perspective on the student loan debt reduction debate, I asked Trinity students to tell me what the Biden plan means to them. Trinity students don’t hold back! Their comments:
Kelsey Henderson, SPS Senior, Business Administration:
I would like to recall to mind that Biden said he would get rid of all student loans. I understand we have to start somewhere; I hope this plan is not the solution but the start to eliminating all student loans. However, if this is the solution I suppose something is better than nothing. Lastly, politicians should be held accountable for the promises made while running for office. These promises aided in their election and as you can see from the backlash and countless memes we have not forgotten!
Shandale Scott, SPS Senior, Human Relations:
President Biden’s loan forgiveness plan will assist numerous students in minimizing their debt. His initiative to address this issue will help many become financially prepared in fixing their credit, purchasing property, starting their own businesses, or just having more discretionary income to enjoy their earnings. Student loan debt has been an issue for quite some time and it has overwhelmed many students in choosing whether or not to pursue higher education because of the expenses associated with tuition, housing, and books and supplies. Individuals who qualify for the student loan debt relief and repayment plans can take this opportunity as a way to rebuild and restart their financial goals.
Although this is a great plan to help many Americans with their student loan debt, I believe the underlying issue as to why so many had to go in debt in the first place is the problem at stake. America is one of the richest countries in the world. With that being said, anyone who is low-income or needs additional financial assistance to pursue higher education to experience the perception of the “American Dream”, should not have to borrow thousands and thousands of dollars to do so. Education is heavily stressed within our society but various government officials fail to allocate adequate funding to colleges and universities in need of assisting its students. College education should be affordable for all to bridge the gap among all socioeconomic groups to eliminate educational disparities
Donko Kaka, CAS, Senior, Biology:
I personally disagree with the commentators who suggested that students should pay all the loans back. Students that don’t have wealthy parents are doing above and beyond to change their lives as well as their families. Reducing their loans is a form of equity. These students will also benefit the country with their degree. Its a win win situation.
Stephanie Thomas Foo, SPS Sophomore, JAMS:
“What came first? The chicken or the egg?” Or how I view this country’s student loan debt: I am a 35 year old undergrad student who has lived through 3 recessions. The 2001 recession following the Y2K hysteria, the 2007-2009 housing crisis, and the 2020 recession caused by the covid-19 pandemic. Each of the before-mentioned recessions was rescued using government funds through “recovery” acts to save banks and lenders. It’s not surprising to me that elitists who benefited from these recession bailouts that helped recover their pensions are turning their noses up to a student loan forgiveness program. Federal student aid/loans can arguably be considered one of the most predatory lending practices in the world. Most students graduate and are not eligible for jobs to cover $50,000 worth of the student loan debt most undergrad recipients are in post-graduation. Again, what came first? The systemic practice of unaffordable degree programs that are now the basic requirements to any decent job/career, or the inability to pay back the loans? We’re forced to chase higher education and unfortunately the debt is connected to the finish line.
Felicia Johnson, NHP Graduate Student, Counseling:
I graduated [from college] back in 1998. I have been paying my student loans off and on since… Because of the forbearances, deferments, and interest, I owe much more than the principal loan. I believe that I have paid off the principal but the fees and interest keep the balance astronomically high. Since graduating I have been an officer in the Commission Corps working in the prison system, a contractor for DOD/ military, a contractor with a non-profit, and worked with homeless communities. Every time I look into loan forgiveness programs there is always some glitch that causes individuals like me to be unqualified or disapproved. Let’s not forget how they contact you and offer some kind of debt consolidation that would lower your interest rates and then when the company changes the interest rates go through the roof causing more debt. I have talked with many of my peers and we all believe that we are only paying the interest and fees to the banks. Nothing that I have paid or my peers have paid is going towards the principal. I believe I will go to my grave in student loan debt. The whole student loan industry is a ripoff. The American public bailed out the banks and the automobile industry I do not understand why all student loan debt can be forgiven. If not anything else I believe students should only pay back the principal of the loan, with no fees or interest.
Janet Platt, SPS Senior, JAMS:
I can only imagine people who criticize were able to pay for college tuition out of their pockets! Not all have that privilege. I know people with master’s and doctoral degrees making under $100K barely making it. Yet we take out all this student debt. Wealth should be spread around for everyone to be able to support themselves and their families. And the very cost of college is outrageous, which is why some choose to skip it altogether to be costly.
I am a working Senior who’s worked in management but was paid pennies for lack of a degree, so I returned to school to better support myself and now my 7 yr old daughter.
This would be a financial relief for many who have strived to live the American dream of comfort in knowing you can support yourself at such a high cost. Land of the free is an understatement when it only applies to the rich, and it’s is not dispersed in equity. And education is part of that. People are struggling to pay these loans off. Yes, I am overjoyed. I’m running out of money and I’m a newly FTE employee of the Federal Government. Yes, we deserve every penny of it. Give the working class people a break. Please don’t punish us any longer!
Kathi McMillan, SPS First Year, Health Services:
I think it’s an excellent plan for some of our community because most people have been paying on their student loans for years and haven’t even put a dent in it. If you ask me, I think college education should be free for every American in the United States.
Grace Assengone, CAS First Year, Psychology:
During his presidential campaign, our president, Joe Biden made multiple promises to us. One that we were all looking forward to was his student loans debts forgiveness plan. It is a well known fact that the majority of people who have earned a degree find themselves buried in thousands and thousands of student loans debts by the time they are done with their education. Even though there is no guarantee that their degrees will get them a well paying job, most people believe that it is still worth a shot. Biden’s plan to forgive student loan debts will be extremely helpful to many, especially those people who put in the work and rightfully earned their degree but have no jobs, or those people who did not get to finish their education because the financial strain was too much, even the ones who are knee deep in debts with absolutely no degree. All these people were ripped off by the American educational system which forces you to take out thousands of dollars in student loans that have to be repaid some time after you earn your degree. No where do these loans guarantee a degree or a well paying job. Even those people who are lucky enough and are able to put their degree to use by earning a well paying job still find themselves in great amounts of debts that take them years to fully pay off. Joe Biden’s student loan debt forgiveness program is his way of relieving degree seekers from their extreme financial hardship as well as giving people access to less financially draining education. Biden will forever be remembered for the great president that he is. It is refreshing to see a president who not only cares for his country but also the people in it. I believe I speak for everyone when I say that president Biden is lifting a huge weight off our shoulders by temporarily or permanently relieving us of our student loan debt.
Kimberlyn Booker, SPS First Year, Early Childhood Education:
I think that it’s a start and can be very helpful to a lot of people. Yes, it would be awesome if he cancels the student loan debt for all like he promised, but this is a starting point. Hopefully he can find it in the US budget to cancel all student loans very soon. Until then, we should be happy that some of us are getting something.
Tina Nelson, SPS Sophomore, Health Services:
The President’s plan to reduce student loans is important to me. I disagree with the commentators expressing that people who take out student loans should have to pay them all back. People should not be left in financial debt because we want to broaden our career opportunities by pursuing a college degree. It is important to me to receive my degree for greater career opportunities. I have been in the workforce for years and I am not able to maximize my career due to not having a college degree. College helps people to expand their choices. Unfortunately, receiving higher education is a penalty for some people because they cannot provide fully for themselves or family once they graduate from college due to owing so much money. Education should be a ticket to a better life, not a punishment.
Ruth Appiah, CAS, Senior, Business Administration:
I think this plan is great because it will be very hard for me to pay my loans. My mum is not feeling well and not working! This will help me a lot. I will be the happiest person on earth if this happens.
Penelope Placide, SPS Junior, Business Administration:
President Biden’s current actions to forgive $10,000 for student loans is a significant first step. However, when running for office he stated that he intends to eliminate all student loan debt. As a current student and first-generation college attendee, this issue is very personal and significant. Being part of the lower class, for the longest time furthering my education didn’t seem like an option. Coming out of higher education without a large amount of debt would be the beginning of an almost equal opportunity to be successful, without the burden of debt and stress. As a student, I’m waiting for all student loan debt to be forgiven. The current setup for higher education in The United States clearly demonstrates that success is deemed for those who can afford a good education and, those who cannot are automatically set up for failure. I am glad to see President Biden taking steps towards his goal but, expect more and hope to see him follow through on his promise.
Nicole Lopez, CAS Sophomore, Psychology:
Speaking from the perspective of an international student who cannot apply for the FAFSA or other types of aid, only private scholarships from Trinity and other non-profit entities. I agree with Biden’s Plan for the simple fact that studying should not be a lifelong monetary martyrdom, college, beyond being an option, is a privilege that most students want to have. Biden is thinking of those students who, despite not having enough money, decided to take a risk and study with a future of debt, Biden is making student life a little more accessible and supporting education.
Stephanie Salinas, SPS Sophomore, Human Relations:
I believe that President Biden’s plan to make some student debt relief a reality will help a lot of individuals and families. I know that it is not what he had promised going into his presidency, but it is some form of help. This could be one step closer to what he had initially promised.
Markeyda Harper, SPS Sophomore, Early Childhood Education:
I believe he once said the whole loan was going to be forgiven and now its just 10,000. I believe he should have never spoke on the loan forgiveness if he was going to take back what he said. 10,000 is a start and yes it can help most people.
Tracy Taylor, SPS Sophomore, Early Childhood Education:
I am not only shocked but can’t even begin to understand how students with “astronomical” student debt feel. We all want to become successful in life or even just to have more opportunities due to more education but to make a promise to cancel or eliminate all student debt then pick the lowest amount to cover is awful. I will say that though I am not agreeing with the amount Biden has agreed to “eliminate”, I guess some elimination is better than none. I pray better days ahead!
Anonymous, CAS Sophomore:
I am a sophomore at Trinity and I have had an entire journey to get where I am today. I work hard just to pay for what I need and I am in the process of getting financial aid. I say all of that to say I am in no financial position to pay off my loans or even pay for school if I wanted to. I appreciate the president’s efforts to contribute to our student loans but why get our hopes up in saying you will completely get rid of student loans if that was intangible? I do not follow politics because it gives me a lot of anxiety but I listened to him when he said that and my first thought was, “this sounds way too good to be true, I would need to see it to believe it” and once again not discrediting his efforts I just wished he did not make promises not knowing if it would be possible. Its just disappointing to everyone who dependent on that promise becoming a reality.
Anonymous, SPS Student:
I think that President Biden’s plan to reduce the student debt for some Americans is great. However, I believe that because of his campaign promise it would be amazing if he could have done $10,000 for all Americans,but I do understand why he made this final decision. The decision to forgive $10,000 for some Americans and $20,000 for the most vulnerable households speaks volumes. It will definitely give the Americans that received the student loan forgiveness a lot of relief and their households will benefit from it for years to come. I am actually one of those Americans, and it will definitely help me in the future.
The Extended Pause on Loan Repayment is another helpful incentive as it gives Americans more time and relief before the repayment starts. I am sure they are benefiting by being able to spend that money on other things especially with the inflation in our country. The Public Service Loan Forgiveness is actually better than the reduction of student debt. I am a DC Government employee and we were advised of this option for public student loan forgiveness. However, I do think that this has always been an option, but President Biden allowed more flexibility for this forgiveness.
Income-based Repayment Plan is another awesome option. It is clear that President Biden has kept his campaign promise and is trying his best to accommodate everyone. If you did not qualify for the Reduction of Debt it is clear that he made sure other options were available to the middle class which he believed needed it the most. Since I have been following politics it seems as if the middle class sometimes get left out, but it’s clear that today is a new day. I can’t wait to see what’s next from our President.
Anonymous, SPS Student:
I think it’s a good start and I hope that many students can enjoy this benefit, and I also understand that everyone is saying “I wish is more” …
Anonymous, SPS Student:
Once I had the opportunity to read more on what the plan entailed, I thought that it was a start and good that the President wanted to offer us something. The only thing that confused me a little was the fact that he stated during his campaign, one of his goals once entering office would be to get rid of all student loan debt. On the other hand, I do understand the hurdles he has to overcome due to the criticizers, not agreeing with him on giving students anything. As I stated before, it is a start and hopefully we will be on track of receiving more and all loans will be forgiven.
What Does a Trinity Economist Say About the Biden Plan?
Dr. Dennis Farley, Economics Program Chair, offered these observations:
My initial take on the Biden Plan is favorable. Politically, it’s a smart move. It shows that he is not completely stymied by the Republicans in the Senate in achieving something useful. It is one more thing Democrats can run on in November. It is not connected to Donald Trump.
Economically, it could have a small effect in making fiscal policy more effective. The whole point of expansionary fiscal policy (tax cuts or government spending increases) is to boost the disposable income of households. With more disposable income, households will spend more on consumption, thereby raising GDP in the short run.
When households have large debt burdens, however, increases in disposable income tend to get siphoned into debt repayment rather than into increased consumption. Fiscal policy becomes less powerful in moving GDP back toward some desired level. My guess is that the improvement in the potency of fiscal policy will be very small, but at least it’s in the right direction.
[I asked Dr. Farley to comment on some of the criticisms that the plan is inflationary. His response:]
I don’t see the inflationary effect as large. It will be swamped by whatever the Fed does. I further think (and this is an opinion, not an economic analysis) that we should be subsidizing people to go to college.
…By itself, however, more debt is not inflationary. It can be if the Fed decides to buy the debt and print money to pay for the purchase. But the Fed is not doing that right now. It is moving in the other direction to tighten monetary policy to fight inflation.
The economic arguments are not the powerful ones here; the political arguments are.
- Debt relief mollifies the left-wing of the Democratic party to keep them in the fold and minimize sniping ahead of the mid-terms…
- Debt relief retains votes among center and center-right Democrats who were wondering “What have you done for me lately?” and could have been seduced away by independent, or even reasonable-sounding Republican candidates…
- Regarding the “class warfare” argument that the Post editorial made, there is very little downside to the President’s actions. Trumpism has a stranglehold on non-college educated males….