CINCINNATI — A new White House plan aims to write off massive college debt for millions of Americans.

Since its announcement on Wednesday, the proposal has brought hope to many who have struggled with financial burdens for years, while others wondered why they should foot the bill for someone else’s debt.


What do you want to know

  • Opinions are mixed and strong on a White House plan to write off student loan debt for millions of borrowers
  • Some see a game-changing opportunity they didn’t think possible
  • Critics don’t think it’s fair for taxpayers to pay off someone else’s debt
  • University officials say student loan reform is needed to prevent prospective students from falling into similar situations

Under President Joe Biden’s plan, borrowers who earn less than $125,000 a year, or families earning less than $250,000, would be eligible for $10,000 in federal loan forgiveness. Those who received Pell Grants — funds available to undergraduate students facing significant financial challenges — would be eligible for forgiveness of additional loan debt of $10,000.

Parent Plus Loans — federal loans taken out by parents to pay for their children’s education — are also eligible.

Biden announced several other aspects of the program to ease the burden on student loan holders, including extending the pause on all federal student loan payments through the end of 2022.

“Honestly, this is the first time I’ve seen any hope of making legitimate progress in paying them back,” said Dale Marie Pontz, 43. “That doesn’t go far enough — these loans still seemed predatory even though they were federal aid, but it’s definitely a start.

Pontz, who attended high school in Southwestern Ohio, stayed close to home for college and attended Northern Kentucky University. After earning a degree in communications, she earned a graduate degree from the University of Cincinnati.

While Pontz had a scholarship for college, getting extra loans felt like the default situation for many students in the late 1990s and early 2000s, she said.

Her parents were unable to help her with living expenses, so getting loans was the best option until she could find a job that suited her schedule as a student. full-time, Pontz said.

Pontz qualified for “a lot of financial aid and Pell grants,” she said.

After graduating, Pontz spent some time as a part-time college teacher, but struggled to find a job. As a result, she spent time in abstention and “interest got out of hand very quickly,” she said. His initial loans of $35,000 soared to around $60,000.

“It got to where I thought I would never pay them back,” she added. “The financial difficulties of my younger years set me up for what felt like insurmountable debt.”

Now Pontz sees a light at the end of the tunnel.

A ‘mixture’ of feelings about the cancellation of student loans

Today, Patti Whalen supports student loan forgiveness, but she’s had mixed feelings about it in the past.

The 59-year-old became a mother early in life and at times struggled to make ends meet. Over the years, she and her husband “saved and saved,” foregoing things like family vacations and “fancy ball gowns” to pay for their children’s education.

At 38, she had saved up $80,000 to send her eldest daughter to college. Whalen also educated her two other children, as well as herself and her husband.

She admitted to being devastated watching her friends go on ‘the crazy vacation we couldn’t do’, only to see them send their children to college with no savings and end up with tens of thousands of dollars studying loan debt.

These mixed emotions subsided after a conversation with a few of his younger peers.

“One day I sit down with some of these young adults, in their thirties, and they talk to me about how you can’t declare bankruptcy to get out of student loan debt and predatory loans for a federal government guaranteed loan,” she said.

Even though she knows someone has to pay this debt, she takes issue with the fact that people agree to give “tax breaks and incentives to big companies to be present in these communities” and do not see the same economic benefit to help those with student loan debt.

More than 43 million people have federal student debt, with an average balance of $37,667, the Associated Press reported. Nearly one-third owe less than $10,000 and about half owe less than $20,000.

The White House estimated the plan would wipe out federal student debt for about 20 million people.

Students walk through the University of Cincinnati campus. (Casey Weldon/Spectrum News 1)

“In many cases, it probably wasn’t the child’s fault,” Whalen added. “To get into college, these young teenagers have to take out these exorbitant loans, and then they’re basically met at the school gates by credit card salesmen looking to take advantage.”

Rocky Boiman sympathizes with those facing large amounts of student loan debt, but said it was the result of a choice they made.

“There was no surprise there. It’s not like something happened and all of a sudden they found themselves with all this debt,” said talk show host Boiman. -show on 700 WLW, a conservative-leaning radio station. “They knew exactly what they had signed up for. So why should it be everyone’s responsibility to pay for it? You made that decision, so live with it.

Boiman said he sets money aside from every paycheck in Ohio’s 529 plan. This is a tax-free (or tax-advantaged) program to help parents and guardians save for their children’s future college expenses. The rules vary by state. In Ohio, a person can deduct up to $4,000 per year for a qualified contribution.

“I don’t think that’s fair,” Boiman said of the loan forgiveness offer. “The vast majority of people in this country have not gone to college and have incurred debts that they cannot repay. But they are the ones who will have to pay for people who are in a difficult situation. »

A former high school football star, Boiman went full circle at the University of Notre Dame in the late 90s. Had he not won the scholarship, Boiman doubts his family could have afforded the send to the prestigious private university in South Bend, Ind.

“I should have paid out of pocket or I wouldn’t have gone,” he said. “It’s so simple.”

Boiman is particularly upset that some people have “broke their ass off” paying off student loans or taking jobs — like joining the military or working in the civil service — that can lead to those debts being forgiven.

For example, the federal government has a long-standing program that forgives a person’s student loan debt after 10 years of public sector employment and regular monthly payments. Critics of the program called it too complicated.

“I fully recognize that student loans are a big deal for people…who are still paying off their debts, but what about people who have already paid off their loans and have had a hard time doing so,” said Boiman. “Do they also get a grant? Where does it end? »

Who pays what and how?

Whalen took to social media this week after seeing what she saw as “hypocrisy” among critics of the student loan forgiveness plan. This includes some of his own friends.

The Cincinnati resident recalled watching some of those same critics “live beyond their means” until they eventually filed for bankruptcy in their personal lives to get a fresh start without being weighed down by debts.

“I’m sitting there and I see these same people standing up and yelling ‘personal responsibility’. We had to pay for our kids,” Whalen said. “And I’m asking, ‘You filed for bankruptcy. Who paid for this? Debt doesn’t just disappear. They broadcast it around all of us.

It’s unclear how the federal government plans to recoup the tens of millions of dollars lost in lost student loan repayments. But one thing is certain, someone is going to pay for it, according to Thomas Lebesmuehlbacher, Ph.D., assistant professor of economics at Xavier University.

In a statement, the The White House noted that the cumulative federal student loan debt is $1.6 trillion. and rising for more than 45 million borrowers.

This program would increase the national deficit, Lebesmuehlbacher said, but estimates differ on the amount. Either way, Congress should compensate with a combination of strategies from tax increases to spending cuts, Lebesmuehlbacher said.

“Rather than it being a debt accumulated by these approximately 40 million borrowers, it will all fall on the shoulders of the federal government,” he added. “The public deficit would certainly increase. We don’t know by how much, but we know someone should.

Brent Shock, vice president of student enrollment and success management at the University of Miami, said the proposal would provide debt relief to millions of low- and middle-income borrowers. But he stressed that loan relief without student loan reform is an incomplete and imperfect solution.

Since 1980, the total cost of public and private four-year colleges has nearly tripled, even after accounting for inflation, according to research from College Board, a nonprofit organization focused on advocating for students, schools, and educators.

Under Biden’s plan, only loans issued before July 1, 2022 would be eligible for relief.

“Shedding student debt today doesn’t help those who will need to borrow tomorrow,” Shock said. He called on the US Department of Education to come up with reforms to help current and future students avoid similar pitfalls.

Shock specifically mentioned eliminating origination fees and lower interest rates, simplifying repayment plans, and requiring federal loan servicers to meet higher customer service standards. He believes that other changes are also overdue.

“Ultimately,” he said, “to see real and lasting change, Congress must increase investments in the federal Pell Grant program to allow more low- and middle-income families to borrow less to go to university.”