Friends and neighbors –
After a three-year pause, federal student loan payments resumed in October. As of June 30, more than 800,000 residents in the state had outstanding student debt totaling $27.1 billion collectively. With the payment freeze ended, most with federal student loans must now resume monthly payments, presenting economic challenges for borrowers who became accustomed to keeping that money during the pandemic.
If you know that you are going to have payments due this month but think you might struggle to make your payment, there are a couple of options available that you should be aware of.
- First, the federal government created the SAVE plan. This is a repayment plan that is income-driven, so they calculate your monthly payments based on your income or the size of your family. As of last month, about 74,000 Minnesotans have enrolled. https://studentaid.gov/announcements-events/save-plan
- Second, you can apply for a deferment or forbearance. These are short-term options that can help you if you are temporarily unable to make your loan payments. You may qualify for exemptions for a number of reasons, such as cancer treatments, economic hardship, military service, and unemployment. To learn more about deferments, visit https://studentaid.gov/help-center/answers/article/difference-between-deferment-and-forbearance.
- If you know you will be able to make your payments but can’t remember what your account balance is or who you pay, the Department of Education’s website can help. Simply visit https://studentaid.gov/ to figure out your account balance, see a summary of your loans and grants, find your loan servicer, and more. They even have a helpful chat feature.
- There are a lot of people who are in the same position you are. That’s why they also put together a guide for individuals who have questions. It has information for borrowers restarting payments, borrowers making payments for the first time, and borrowers who are restarting after being in default. https://studentaid.gov/manage-loans/repayment/prepare-payments-restart
This also shines a light on the much larger problem of skyrocketing college tuition, which is saddling young Americans with staggering student debt before they even enter the workforce. It is an unsustainable trajectory. If you want to get a Bachelor’s Degree from the U of M, it’s going to run you about $64k. When you factor in living expenses as well as tuition and fees, it could run more than $117,000.
These outrageous costs, combined with pressure to get a Bachelor’s Degree instead of a two-year degree or trade school, force students to take on loans that cripple their financial futures. It makes it extremely difficult to obtain post-graduation goals that have come easier to generations before like purchasing homes, getting married, or raising families.
We must curb this runaway tuition inflation and expand access to debt-free college pathways. If we don’t act, the snowballing price of higher education will rob entire generations of economic security and stability. We have to make it far easier for students and recent graduates to fully participate in our economy and achieve their dreams. Buying a house should not be out of reach. Buying a car should not be out of reach. Young people should not be buried under a mountain of debt just for seeking education.
There are a lot of things we can do and a lot of things that Republicans did when we were the Senate majority to make college more affordable and open up new pathways to cutting-edge industries.
But colleges have a responsibility too. The runaway pace of college tuition cannot continue.
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