What’s next: Student loan debt forgiveness

On March 22, 2020, then-presidential candidate Joe Biden reiterated a campaign pledge via Twitter to “forgive a minimum of $10,000/person of federal student loans,” stating, “Young people and other student debt holders bore the brunt of the last [financial] crisis. It shouldn’t happen again.”

In his first year-plus in office, President Biden has canceled about $16 billion in federal student loan debt through programs primarily targeted at borrowers with disabilities, students who were defrauded by their institutions, and people who work in public service. Still, the Federal Reserve has reported that nearly $1.75 trillion was owed in student loan debt as of December 2021. Approximately 17 percent of U.S. adults – 43.4 million Americans – owe student loan debts to the government, according to Federal Student Aid. And the student loan payment pause initiated during the COVID-19 pandemic will end on May 1, 2022.

Jeanne Scheper is one of UCI’s leading voices on student loan debt. The associate professor and chair of gender & sexuality studies had more than $72,000 in student debt upon completing a Ph.D. in English literature at UC Santa Barbara – with 90 percent of the loans taken out for postgraduate studies. An advocate of people sharing their debt stories as opposed to being ashamed of them, Scheper here helps us answer “What’s next?” with student loan debt forgiveness and dissects the systemic effects of student debt.

Student loan debt forgiveness has really moved into the forefront of the minds of our nation’s leaders. What catalyzed the amount of attention the topic is currently receiving? 

March 2020. The pandemic shifted our perspective on many aspects of our lives. Education debt is one of the things that people are seeing from a new perspective. The economic impact payments through the Coronavirus Aid, Relief, and Economic Security Act – also known as the CARES Act – had a measurable effect on people’s day-to-day existence, and the country began to see the important economic benefits these relatively small amounts of relief made to the health of the national economy. At the same time, student loan payments were paused. And along came changes to the Public Service Loan Forgiveness Program, making more people eligible for debt forgiveness. From mask wearing to a renewed sense of the benefits of government social welfare programs, our idea of the public good has changed. There is a growing awareness that when we talk about the public good, our approaches need to account for the structural roots of racial and economic inequalities.

You mentioned one program that directly affects employees of the University of California: the Public Service Loan Forgiveness Program. How can someone take advantage of that opportunity? 

If you have student loan debt and you are employed by the University of California or in the nonprofit sector (nurses, firefighters, teachers, veterans) and you think you might qualify for the PSLFP, run, don’t walk, to the Department of Education’s StudentAid.gov/PSLF site. This is important: Even if you have not qualified in the past, you might qualify now under recent changes to the program and the new, temporary expansion of eligibility that exists until Oct. 31, 2022. The Department of Education announced on March 9, 2022, that 100,000 people are eligible for cancellations amounting to $6.2 billion in loans eligible for discharge.

When the changes were first announced, Kelly Anne Brown of the UC Humanities Research Institute and I moderated a webinar in fall of 2021 called “Student Loan Debt and the PSLFP: A Workshop With Experts.” Representatives from the UC Office of the President’s Student Financial Support unit and Jay L. Austin, executive director of the Law School Admission Council’s RISE Alliance, let people know about this limited opportunity, how to navigate the process, and the impact of debt on inclusive excellence. Over 1,000 people registered for the webinar, which is available to watch online.

The effect of the PSLF on the UC community – on people’s welfare, futures and well-being – is potentially enormous. These changes can impact students, faculty, librarians, alumni and parents. For years, I’ve been advocating that the UC have a staff office that makes this federal program accessible to its eligible employees – and the need is even more urgent given these changes. More information for UC employees can be found here.

Sometimes it feels hard to keep up with all the latest opportunities to have student loan debt forgiven. What programs currently exist – and where can someone find that information?

It can be tough. First, talk to other borrowers and anyone you know that has had their loans forgiven. The PSLF application process isn’t easy. You need a high level of frustration tolerance. (I’m still trying to get my employer verification from the UC approved by the Department of Education after two submissions because they’re telling me that I still need a “wet signature” in addition to the digital one I provided.) There are a host of organizations out there that offer help in the form of workshops, toolkits and counseling. You can find a starter resource list we put together for the webinar here.

The expansion of loan forgiveness was made possible because debtors came together and organized. It’s thanks to groups like the Debt Collective, Student Debt Crisis Center, Student Loan Justice, Shared Harvest and our unions that these opportunities exist. The mutual aid ethos of the debt forgiveness movement is “borrowers helping other borrowers.” I continue to share my debt story with others because I think we need to destigmatize debt in order to understand how debt works.

In higher education, there’s much more to be done to understand how debt impacts the future career prospects for all our students – including our Ph.D. students. The UC’s Humanists@Work graduate career initiative, for example, has long been discussing the impact of debt on professional trajectories, and as we think through what the public good means, it’s important to consider how debt affects our students and communities.

What’s on the horizon for student loan debt forgiveness?

Forgiveness is on its way, because in the wake of the pandemic, no one can deny the gender and race inequalities associated with care work and the uneven distribution of debt. The CARES Act provided historic student loan relief. There is a growing national awareness because the student loan pause revealed what a difference debt cancellation makes in peoples’ lives and futures.

The current expansion of loan forgiveness for public and nonprofit workers was made possible because debtors mobilized. Advocates and activists are now asking everyone to consider broad-based cancellation of student debt for all borrowers and to understand debt in terms of economic and racial injustice, precarity and the defunding of public education. More people can now imagine the huge impact that cancellation of student debt for all borrowers would bring.

How does student debt affect the pursuit of diversity, equity and inclusion in higher education?

Debt is redlining our schools, partly by disincentivizing students of color from pursuing graduate education and creating other barriers to access. Debt is not about personal failure; it is, rather, a result of persistent structures of inequality.

Recent studies show how debt works as a gatekeeper for working-class and first-generation students, women, gender-nonconforming students and those of color. A 2021 Education Trust study named student debt a “Jim Crow” process and “a racial and economic justice issue.” Black borrowers in the study noted that “a system that encourages the use of student loans and ignores racial and economic evidence of inequality is designed to reproduce inequality.”

As I wrote in an article for Radical Teacher, we are all “mortgaged minds.” I want to be clear, however, about one common misinterpretation of this type of data. Some people learn about the racial disparities in debt burden, and that leads them to discourage underrepresented minorities from pursuing education, especially graduate education. This misinterpretation is a misguided attempt to protect underrepresented minorities from student loans. What this misses is that education continues to be the No. 1 upward mobility tool in this society.

Even when we account for the persistent race and gender bias in employment for well-credentialed underrepresented minority applicants, barriers to accessing those educational credentials take us back to the Jim Crow educational era. Accruing student loan debt is not a preserve for middle-class and wealthy students.

The lessons of the 2008 subprime housing crisis revealed massive racist predatory lending that resulted in significant loss of the wealth held in housing stock of African Americans. We learned similar lessons from the predatory loans doled out by for-profit education schemes. Thus, the horizon of public university education is not simply egalitarian access to debt but, rather, conceiving of university education as a net social good and supporting visions such as public service loan forgiveness without fees.

In other words, the solution to the debt spiral is not to tell certain students not to take out loans and thereby reproduce education as a class and race privilege. Rather, we must look for other solutions – such as re-funding public university education, debt relief and debt cancellation – in order to collectively imagine a truly just, affordable and equitable system of access to higher education in this country.

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