Angela Carpio, a 40-year-old software developer and mother of two, had hoped that after nearly two decades of student loan payments, she was finally nearing the end. However, as the $1.74 trillion U.S. student loan crisis continues to unfold, her finances are once again in turmoil, caught in the middle of a heated political battle. This crisis now affects 45 million Americans, most of whom owe the federal government.
Angela’s story is emblematic of the struggles many borrowers face. After borrowing $25,000 for her education at the for-profit DeVry University and later earning an associate degree at Valencia College, she has made steady payments. Yet, due to accruing interest, her loan balance still stands at over $20,000. “I’m just in limbo,” she says. “I don’t know what’s going to happen, and it scares me.”
Since the 1990s, the U.S. has offered some borrowers a repayment plan based on income, with the promise that the debt will be forgiven after 25 years. However, participation in this program has remained low, partly due to a lack of awareness. Initially skeptical about loan forgiveness, President Joe Biden adopted it as a central policy to garner support from younger voters burdened with debt. Under Biden, the government has forgiven over $168 billion for more than 4.7 million borrowers.
Yet, Biden’s most ambitious plan to forgive $400 billion for 16 million borrowers was struck down by the U.S. Supreme Court last year, ruling that the administration had overstepped its authority. A subsequent plan, called Save, which promises lower monthly payments and debt cancellation after 20 years, is currently on hold due to ongoing legal challenges from Republican officials who argue that forgiving loans is unfair to those who did not borrow for college.
The legal battles have left borrowers like Angela in uncertainty, further complicating family budgeting and planning. Angela had enrolled in the Save plan, which promised to halve her monthly payment, but the suspension of the plan has left her in a state of confusion. “It’s just a mess,” she says. “It’s very confusing and very hard to plan when the most concrete things are no longer there.”
Veronica Williams, another borrower with $127,000 in student debt, shares similar frustrations. Despite her support for Biden in 2020, she now finds herself waiting for clarity about her loan payments. “There’s no clear understanding of what we’re supposed to do,” she says.
As the 2024 election nears, student loan forgiveness has become a contentious issue. Vice President Kamala Harris, now the Democratic nominee, has pledged to continue efforts to provide relief, but the issue has not been a focal point on the campaign trail. Meanwhile, Republican candidates like Donald Trump have criticized the debt forgiveness plans, labeling them as unfair and costly.
The political ramifications of student debt forgiveness are significant. While polls show strong support among Democrats and independents for some form of relief, the broader electorate remains divided. Less than 40% of U.S. adults have a college degree, and critics argue that blanket forgiveness would benefit higher-income households disproportionately. “The politics of asking your plumber to pay for your kids’ fancy liberal arts degree — this doesn’t make a lot of sense,” says Anthony Fowler, a professor at the University of Chicago.
Despite this, some experts, like Mallory SoRelle from Duke University, argue that the plans could have gained more traction had they been implemented sooner. “Voters still care about this issue,” she says, noting that many Americans with student debt did not graduate and still support some form of relief.
For borrowers like Robert Henley, a 68-year-old public sector retiree from Tallahassee, the issue is one of fairness. He opposes debt forgiveness, feeling it’s too costly and unfair to taxpayers who sacrificed to save for their children’s education. However, Henley says he will likely vote for Harris in November, citing his mistrust of Trump and other concerns.
As the November election approaches, the future of student debt relief remains uncertain, with borrowers like Angela Carpio and Veronica Williams stuck in a political tug-of-war that threatens their financial stability and future prospects.