Economists, Higher Education Experts Participate
SARASOTA — Licensed financial consultant and mother, Cabicea Moore was a “by-product” of the Great Recession, earning her bachelor’s degree more than a decade ago when the economy was collapsing.
During a time of high unemployment, she decided to go back to school and earned an MBA, but her student loan debt also hit six figures.
Today, that lingering debt is the main reason she still can’t become a homeowner.
“I left college with a small amount of debt and then went back to school to further my education and amassed six figure debt,” she said.
Before:Sarasota Housing Nonprofit Supported by New Trauma Informed Training Program
When:Charles & Margery Barancik Foundation Board Approves $8 Million Grant
Her experience is not uncommon, with homeownership, family planning choices, and many other life decisions impacting graduate students, according to higher education experts.
A study by the National Association of Realtors highlights disparities in home ownership rates among millennial borrowers, and student loans have historically been a barrier to home purchases for low- and middle-income earners. It became clear.
Moore, 37, is among those with student loan debt who stand to benefit from the recently announced Biden administration forgiving some of that debt. She has mixed feelings about the plan. She stands to see some relief, but she wanted more than that.
“We take these loans to get better jobs and to make our lives and our communities better. Businesses have been forgiven millions of dollars in PPP loans.” ‘” she said, referring to pandemic-related aid.
Others, however, have criticized the plan, saying it’s unfair to those who paid for college and loans themselves.
USF Sarasota Manatee graduate student Lindsey Couvillon said she owes $76,000 in student loans.
She graduated with a BA in Psychology in 2017, at which point she was already $60,000 in debt.
For the past eight years, Couvillon has been a student and worked up to three jobs at once to pay for her education. She recently accepted an additional $16,000 loan for her graduate studies.
“I wasn’t eligible for any grants or anything… I paid for college entirely on my own and with loans. I knew I had to pay it back, but when I started going to school didn’t understand the gravity of it, I’m 19,” said Couvillon.
With no other options and no financial support from her parents, Ms. Couvillon said her only remaining avenue to finance her education was a loan.
Couvillon, 29, plans to complete her master’s degree in 2025, but plans to further her last education with a PhD. Once she completes her PhD, her student loan debt will be just under $200,000.
“At first, a few years ago, I was thrilled to hear that my loan would be forgiven…I worked three jobs and never made enough money to pay it back at any time.I I have to pay for this… I’m off for the rest of my life,” she said.
“There’s always that thought in the back of my head, and I’m afraid of it.”
Despite taking pride in achieving his goals, Couvillon feels the weight of his financial situation, and is struggling with starting a life in debt with a future partner, having children, and himself. I’m worried about owning a house with
“The irony is that I have to do what I don’t like in order to have a better career for the future. It’s frustrating. I have to work to see,” said Cuvillon. “Getting my education is very bittersweet.”
Plans to Forgive Some of the Borrower’s Debt
President Joe Biden’s three-part plan for student loan relief outlines student loan forgiveness for “the most needy,” according to its fact sheet. A long-awaited, vetted relief program is expected to cancel about $240 billion in student loan debt for 43 million borrowers, but some economists say the cancellation could cost trillions of dollars. I argue that it is possible.
Federal student loans up to $10,000 per borrower and up to $20,000 canceled for Pell Grant recipients. Debt cancellation is also expected for individuals whose annual income is less than her $125,000 and for married couples or householders whose annual income is less than her $250,000.
Borrowers in Florida account for $100.9 billion in total student debt, according to a report by the Education Data Initiative, a researcher-led think tank that collects accessible data about the education system. Their Spring 2022 report found that borrowers living in the Sunshine State had about $38,000 in student loans.
Millennials make up nearly half of Florida’s 2.6 million student loan borrowers.
But local higher education advocates, young experts and economists agree that the median doesn’t give a clear picture of how student-loan debt and a bloated economy have affected many borrowers. .
Michelle Snipes, professor of economics at the University of South Florida Sarasota Manatee, said the amount of debt borrowers owe is only part of the overall problem.
Since the debt cancellation announcement on August 24, Snipes has noticed that borrowers — both still in debt and those who have paid off their loans in full — are complicit in the scheme. Freedom from their debt.
“If the borrower was able to pay these payments upfront, it means you have the money from the start,” he said. , we’re making regular, consistent payments, but the interest rates are so high that we’re just paying interest and not lowering the principal,” Snipes said.
Snipes argues that the plan to cancel the loan will not have a significant socio-economic impact for borrowers who are still paying off their debt. has not dealt with, he said.
Many students enter college with little or no knowledge of how debt works. Most of them are first-generation low-income, marginalized students. The majority of students who apply for loans do so as their only option to pay for secondary education, Snipes argues. Snipes added that most borrowers take out loans without a clear understanding of the implications of compounding interest, debt repayment and default.
Moore, who works as an internship and career development program coordinator at the Sarasota Chamber of Commerce, said even with knowledge of debt and loans, taking on “good debt” to continue her education was a difficult decision. I was. From an early age he is ready to make himself.
She said her hopes of buying a home were bleak, as student debt and high housing costs created further obstacles.
Fostering financial literacy
At New College of Florida, faculty, staff and advocates are committed to providing students with financial literacy and tools to better navigate the complexities of student loans.
A focus on financial literacy at the institution could be a game changer for freshmen and a big step toward avoiding unnecessary student debt, said Bill Woodson, NCF’s dean of outreach. said.
“The cost of education is too high and the understanding of financial literacy is severely lacking. We educate and promote financial literacy to a cohort of low-income local students. They learn the return on investment.” says Woodson.
Students learn about tuition, housing, and other college-related costs and apply for various scholarships aimed at reducing the initial cost of tuition and removing financial barriers on the path to higher education given the opportunity.
Woodson admitted that divisions over federal debt relief plans are not uncommon when new programs are announced.
“No program or policy is perfect. No program is completely equitable,” he said.
“There are different scenarios for borrower debt…I think this plan was a reasonable first step. ”
Samantha Gholar covers social justice news for the Herald-Tribune and the USA TODAY Network. Connect with her at [email protected] or on her Twitter: @samanthagholar